TOWN OF INDIAN SHORES, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT ... › pages › mun_efile rpts › 2016 indian shores.pdf · COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR

TOWN OF INDIAN SHORES, FLORIDA

COMPREHENSIVE

ANNUAL FINANCIAL REPORT

FISCAL YEAR ENDED SEPTEMBER 30, 2016

Davidson, Jamieson & Cristini, P.L.Certified Public Accountants


COMPREHENSIVE

ANNUAL FINANCIAL REPORT

FOR THE

FISCAL YEAR ENDED SEPTEMBER 30, 2016

Prepared by theDepartment of Finance


COUNCIL - MAYOR FORM OF GOVERNMENT

TOWN COUNCIL

James J. Lawrence, Mayor

Patrick Soranno, Vice Mayor

William F. Smith, Councilor

Michael Petruccelli, Councilor

Diantha Schear, Councilor

Town Clerk Director of Finance

Elaine Jackson Susan L. Scrogham

Town Administrator

Bonnie Dhonau

Chief of Police

Terry Hughes

INTRODUCTORY SECTION


COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016

TABLE OF CONTENTS

INTRODUCTORY SECTION

Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iListing of Town of Indian Shores Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

FINANCIAL SECTION

Independent Auditor’s Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Basic Financial StatementsGovernment-Wide Financial Statements:

Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Fund Financial Statements:Balance Sheet - Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Reconciliation of the Balance Sheet to the Statement of

Net Positions - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Statement of Revenues, Expenditures, and Changes in Fund Balance

Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Reconciliation of the Statement of Revenues, Expenditures and

Changes in Fund Balances of Governmental Funds to theStatement of Activities - Governmental Funds . . . . . . . . . . . . . . . . 21

Statement of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual:

General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Statement of Fiduciary Net Position - Fiduciary Fund . . . . . . . . . . . . . . . . . . . . . . . 23Statement of Changes in Fiduciary Net Position - Fiduciary Fund. . . . . . . . . . . . . . 24

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

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TABLE OF CONTENTS

FINANCIAL SECTION (CONTINUED)

Required Supplementary Information Other than MD&A

Other Post-Employment Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Required Supplementary Information for Single EmployerPolice Officers’ Defined Benefit Pension Plan Under GASB 68

Schedules of Changes in Net Pension Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Schedule of Related Ratios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Schedule of Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Notes to Schedule of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Schedule of Investment Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Combining and Individual Fund Financial Statements and SchedulesNon Major Governmental Fund:

Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Statement of Revenues, Expenditures and

Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Special Revenue Fund:

Statement of Revenues, Expenditures andChanges in Fund Balance - Budget and Actual . . . . . . . . . . . . . . . . . . . . . . . 84

Capital Assets Used in the Operation of Governmental Funds:Schedule by Source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Schedule by Function and Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86Schedule of Changes by Function and Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

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TABLE OF CONTENTS


STATISTICAL SECTION

Financial TrendsNet Position by Component - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Changes in Net Position - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90Tax Revenues by Source - Governmental Activities -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91Fund Balances - Governmental Funds -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92Changes in Fund Balances of Governmental Funds -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93General Governmental Expenditures by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Revenue CapacityAssessed Value and Actual Value of Taxable Property -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Property Tax Rates - Direct and All Overlapping Governments

(per $1,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96Principal Property Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Property Levies and Collection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Debt CapacityRatios of Revenue Debt Outstanding -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99Direct and Overlapping Governmental Activities Debt . . . . . . . . . . . . . . . . . . . . . . . . 100Computation of Legal Debt Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Pledged Revenue Coverage -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Demographic and Economic InformationDemographic Statistics - Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103Principal Employers - Current Year and Nine Years Ago . . . . . . . . . . . . . . . . . . . . . . 104

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TABLE OF CONTENTS


STATISTICAL SECTION (CONTINUED)

Operating InformationFull-Time Government Employees by Function -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105Operating Indicators by Function -

Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106Capital Asset Statistics by Function -

Last Ten Fiscal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107Schedule of Insurance in Force Year Ended September 30, 2016 . . . . . . . . . . . . . . . . 108Service Efforts and Accomplishments Measures -

Police Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

OTHER REPORTS:

Report on Internal Control Over Financial Reportingand on Compliance and Other Matters Based on anAudit of the Financial Statements Performed InAccordance with Government Auditing Standards . . . . . . . . . . . . . . . . . . . . 111

Management Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Attestation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Memorandum on Review of Internal Control Structure . . . . . . . . . . . . . . . . . . . . . 117

Management Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

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LISTING OF TOWN OFFICIALS

ELECTED OFFICIALS

Mayor James J. Lawrence

Vice Mayor Patrick Soranno

Councilor William F. Smith

Councilor Michael Petruccelli

Councilor Diantha Schear

APPOINTED OFFICIALS

Town Attorney Regina Kardash

DEPARTMENT DIRECTORS

Town Administrator Bonnie Dhonau

Town Clerk Elaine Jackson

Finance Susan L. Scrogham

Chief of Police Terry Hughes

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FINANCIAL SECTION

This section contains the following subsections:

Independent Auditor’s Report

Management’s Discussion and Analysis

Basic Financial Statements

Combining and Individual Financial Statements

and Schedules

INDEPENDENT AUDITOR’S REPORT

Davidson, Jamieson & Cristini, P.L.

Certified Public Accountants1956 Bayshore Boulevard

Dunedin, Florida 34698-2503

(727)734-5437 or 736-0771

FAX (727) 733-3487 Member

Members of the Firm American Institute of

John N. Davidson, CPA, CVA Certified Public Accountants

Harry B. Jamieson, CPA Florida Institute of

Richard A. Cristini, CPA, CPPT, CGFM Certified Public Accountants

Jeanine L. Bittinger, CPA, CPPT

Karen Curran, CPA, CVA

Loraine M. Jones, CPA*

INDEPENDENT AUDITOR’S REPORT

The Honorable Mayorand Town Council

Town of Indian Shores, Florida

We have audited the accompanying financial statements of the governmental activities, thebusiness-type activities, each major fund, the budgetary comparisons for the general fund, andthe aggregate remaining fund information of the Town of Indian Shores, Florida, as of and forthe year ended September 30, 2016, and the related notes to the financial statements, whichcollectively comprise the Town’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financialstatements in accordance with accounting principles generally accepted in the United States ofAmerica; this includes the design, implementation, and maintenance of internal control relevantto the preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the AICPA Professional Standards, at Sections 601.55 and 601.56.Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor’s judgment,including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error, in making those risk assessments, the auditor considers internalcontrol relevant to the entity’s preparation and fair presentation of the financial statements inorder to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control.Accordingly, we express no such opinion.

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Accordingly, we express no such opinion. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of significant accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects,the respective financial position of the governmental activities, each major fund, and theaggregate remaining fund information of the Town of Indian Shores, Florida as ofSeptember 30, 2016, and the respective changes in financial position and the respectivebudgetary comparison for the General Fund for the year then ended in accordance withaccounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that themanagement’s discussion and analysis on pages 5-15 and the schedule of net pension liabilities,ratios for the 185 pension plan, contributions and investment returns for the 185 pension plan,and the schedule of the Town’s net pension liability be presented to supplement the basicfinancial statements. Such information, although not a part of the basic financial statements,is required by the Governmental Accounting Standards Board, who considers it to be anessential part of financial reporting for placing the basic financial statements in an appropriateoperational, economic, or historical context. We have applied certain limited procedures to therequired supplementary information in accordance with auditing standards generally acceptedin the United States of America, which consisted of inquiries of management about the methodsof preparing the information and comparing the information for consistencywith management’sresponses to our inquiries, the basic financial statement, and other knowledge we obtainedduring our audit of the basic financial statements. We do not express an opinion or provide anyassurance on the information because the limited procedures do not provide us with sufficientevidence to express an opinion or provide any assurance.

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Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the Town of Indian Shores, Florida’s basic financial statements. Theintroductory section, combining and individual nonmajor fund financial statements, andstatistical section are presented for purposes of additional analysis and are not a required partof the basic financial statements.

The combining and individual nonmajor fund financial statements are the responsibility ofmanagement and were derived from and relate directly to the underlying accounting and otherrecords used to prepare the basic financial statements. Such information has been subjected tothe auditing procedures applied in the audit of the basic financial statements and certainadditional procedures, including comparing and reconciling such information directly to theunderlying accounting and other records used to prepare the basic financial statements or to thebasic financial statements themselves, and other additional procedures in accordance withauditing standards generally accepted in the United States of America. In our opinion, thecombining and individual nonmajor fund financial statements are fairly stated, in all materialrespects, in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, accordingly, we do not express anopinion or any assurance on them.

October 31, 2017

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MANAGEMENT’S DISCUSSION

AND ANALYSIS

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The Town of Indian Shores’ discussion and analysis is designed to:(a) Assist the reader in focusing on the financial issues(b) Provide an overview of the Town's financial activity(c) Identify changes in the Town’s financial position(d) Identify any material deviations from the financial plan (the approved budget)(e) Identify individual fund issues or concerns for the fiscal year ended September 30,

2016.

FINANCIAL HIGHLIGHTS

At the close of fiscal year 2016 the Town’s assets exceeded its liabilities, resulting innet position of $7,376,897 Of this amount, the unrestricted net position of $2,565,732can be used for any purpose that is approved by the Town Council.

At September 30, 2016, the Town’s governmental funds reported an ending fundbalance of $2,791,732 which is a decrease of $141,416 in comparison with the prioryear. This decrease is attributable primarily to the increased expenditures of CapitalImprovement Fund monies for Gulf Boulevard beautification.

During the year, the Town’s governmental activities program revenues were$1,058,215 compared to expenses of $3,407,774 which means that only 31.06% ofexpenses were paid for with program revenues.

On September 30, 2016, unassigned fund balance for the General Fund was $2,225,605.

Governmental fund overall revenues remained flat over fiscal year 2015 with a reporteddecrease of $2,481 or .07%. While Ad Valorem increased by $89,654 or 7.17% andother revenue sources such as Licenses and Permits increased significantly by $284,037or 220.75%, Fines increased by $14,790 or 74.44% and Miscellaneous Revenuesincreased by $24,602 or 397.90%, all were offset by a decrease in IntergovernmentalRevenues from Pinellas County by $414,589 or 47.57%.

OVERVIEW OF THE FINANCIAL STATEMENTSThis annual report consists of a series of financial statements. The three components of thefinancial statements are: (1) Government-wide financial statements which include theStatement of Net Position and the Statement of Activities which presents information presentinghow the Town’s net position changed during the fiscal year; (2) Fund financial statements tellhow these services were financed in the short term, as well as what remains for futurespending. Fund financial statements also report the Town’s operations in more detail than thegovernment-wide statements by providing information about the Town’s most significantfunds; and (3) Notes to financial statements. This report also contains other supplementaryinformation in addition to the basic financial statements themselves.

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GOVERNMENT-WIDE FINANCIAL STATEMENTSThe government-wide financial statements are designed to provide readers with a broadoverview of the Town’s finances, using the accrual basis of accounting, which is similar to aprivate-sector business. There are two types of government-wide financial statements:

1. The statement of net position presents information on all of the Town’s assets andliabilities, with the difference between the two reported as net position. Over time,increases or decreases in net assets may serve as a useful indicator of whether thefinancial position of the Town is improving or deteriorating.

2. The statement of activities presents information showing how the government’s netposition changed during fiscal year 2016. All changes in net position are reported assoon as the underlying event giving rise to the change occurs, regardless of the timingof related cash flows. Thus, revenues and expenses are reported in this statement forsome items that will only result in cash flows in future fiscal periods (e.g., uncollectedtaxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the Town that areprincipally supported by taxes and intergovernmental revenues (governmental activities) fromother functions that are intended to recover all or a signification portion of their costs throughuser fees and charges (business-type activities). The governmental activities of the Towninclude general government, public safety, highways and streets, parking, and culture andrecreation. Property Taxes, utility services taxes, gas taxes, and sales taxes, finance themajority of these services.

The government-wide financial statements include the Town itself (known as the primarygovernment) and all activities of the governing agency.

The government-wide financial statements can be found on pages 16 - 17 of this report.

FUND FINANCIAL STATEMENTSThe accounts of the Town are organized on the basis of funds, each of which is considered aseparate accounting entity. The operations of each fund are accounted for with a separate setof self-balancing accounts that comprise its assets, liabilities, fund equity or retained earnings,revenues, and expenditures or expenses, as appropriated. Government resources are allocatedto and accounted for in individual funds based upon the purpose for which they are to be spentand the means by which spending activities are controlled.

The Town’s funds are presented in separate fund financial statements. These funds arepresented on a governmental fund financial statement. The Town’s major funds are presentedin separate columns on the fund financial statements. The definition of a major fund is one thatmeets certain criteria set-forth in GASB 34. The funds that do not meet the criteria of a major

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fund are considered non-major funds and are combined into a single column on the fundfinancial statements.

GOVERNMENTAL FUNDSGovernmental fund financial statements are prepared on the modified accrual basis usingcurrent financial resources measurement focus. Under modified accrual basis, revenues arerecognized when they become measurable and available. The governmental fund statementsprovide a detailed short-term view of the Town general government operations and theinformation helps to determine whether there are more or fewer financial resources that can bespent in the near future to finance the Town’s program.

The Town adopts an annual budget for all funds and a budgetary comparison statement hasbeen provided for these funds to demonstrate budgetary compliance.

Proprietary funds financial statements are used to report the same functions presented asbusiness-like activities in the government-wide financial statements on a full accrual basis andalso provide both long and short term financial information. The Town does not maintain aseparate enterprise fund (one type of proprietary fund).

A fiduciary fund is not included in the government-wide financial statements because theresources of those funds are not available to finance the Town’s operation. The accountingused for fiduciary fund is similar to proprietary funds.

The basic fiduciary fund financial statement can be found on pages 23 and 24 of this report.

NOTES TO FINANCIAL STATEMENTSThe notes provide additional information that is essential to a full understanding of the dataprovided in the government-wide and fund financial statements. The notes to the financialstatements can be found on pages 25 – 74 of this report.

Other InformationIn addition to the basic financial statements and accompanying notes, this report also presentscertain required supplementary information, including progress of funding pensions and otherpostemployment benefits (OPEB) to its employees. This includes the general fund originalbudget and final budget in comparison to actual expenses.

The supplementary information for the fiduciary fund’s individual fund schedule information isreported on pages 75 – 81 of this report.

CAPITAL ASSETSThe capital assets of the Town are those assets that are used in the performance of Townfunctions. The Town continues to follow GASB Statement 34. Historically, a government’slargest group of assets which includes land, building, improvements, machinery and equipmentand infrastructure – i.e. roads, bridges, sidewalks, curbs, and underground pipes - unlessassociated with a utility, have not been reported or depreciated in the Town’s financial

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statements. The statement requires that these assets be valued and recorded within thegovernmental columns of the Governmental-wide Statements.

GOVERNMENT-WIDE FINANCIAL ANALYSISChanges in net position - As noted earlier, net position may serve over time as a usefulindicator of a government’s financial position. In the case of the Town, total assets exceededtotal liabilities by $7,376,897 at the close of fiscal year ended September 30, 2016. The Townuses capital assets to provide services to citizens; therefore, these assets are not available forfuture spending, because the Town has no intention of selling these assets to generatespendable assets (i.e., cash). The following table reflects the condensed Statement of NetPosition.

Table 1CONDENSED STATEMENT OF NET POSITION ₁

As of September 30

Total

Primary Government

2016 2015

Current and other Assets $ 2,943,426 $ 3,097,772

Capital assets (net of Allowance) 10,183,372 10,806,149

Total Assets 13,126,798 13,903,921

Deferred Outflows of Resources $ 170,910 $ 377,903

Current and other Liabilities 126,545 279,919

Compensated Absences 52,468 40,602

Long-Term Liabilities Outstanding:

Due within one year 384,160 310,723

Due in more than one year 5,357,638 6,365,214

Total Liabilities 5,920,811 6,996,458

Deferred Inflows of Resources $ - $ 38,226

Net Position:

Net investment in capital assets $ 4,803,080 $ 4,646,801

Restricted:

Police Education 2,302 2,302

Police Equipment 5,783 5,783

Unrestricted 2,565,732 2,592,254

Total Net Position $ 7,376,897 $ 7,247,140

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Of the Town’s total net position, 34.8 % represents resources that are unrestricted on how theymay be used with 0.1% being subject to external restrictions.

An additional portion of the Town’s net position 65.1%, represents its investment in capitalassets (e. g. land, building, improvements and equipment), less any related outstanding debtused to acquire those assets. Although the Town’s investment in its capital assets is reportednet of related debt, it should be noted that the resources needed to repay this debt must beprovided from other sources, since the capital assets themselves cannot be used to liquidatethese liabilities. The remaining balance of unrestricted net position $2,565,732 may be used tomeet the government’s ongoing obligations to citizens and creditors.

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STATEMENT OF ACTIVITIES

The following schedule represents the revenues and expenses for the last two fiscal years:

Table 2

TOWN OF INDIAN SHORES

CHANGES IN NET POSITION

Governmental Activities

2016 2015

REVENUES

Program Revenues:

Charge for Services $ 1,057,138 $ 740,477

Capital Grants 1,077 2,182

Total Program Revenues 1,058,215 742,659

General Revenues:

Property Taxes 1,341,389 1,251,735

Franchise Fees 249,676 268,909

Utility Taxes 374,928 372,188

State Revenue Sharing 31,827 31,260

Half-Cent Sales Tax 89,354 92,759

Local Option Gas Tax 24,731 24,195

Local Option Sales Tax 174,366 178,937

Communications Services Tax 127,913 128,540

Other Taxes 7,667 413,651

Investment Income 6,632 8,948

Miscellaneous 50,833 4,933

Total General Revenues 2,479,316 2,776,055

EXPENSES

General Government 980,918 942,067

Public Safety 1,416,864 1,322,445

Physical Environment 968,659 1,042,111

Culture and Recreation 41,333 38,006

Total Expenses 3,407,774 3,344,629

CHANGE IN NET POSITION 129,757 86,080

Net Position - Beginning of year 7,247,140 7,123,011

Restatement of Net Position - Prior PeriodAdjustment due to Adoption of GASB 68 & 71 - (49,956)

Net Position - End of year $ 7,376,897 $ 7,247,140

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GOVERNMENTAL ACTIVITIES

Governmental Activities increased the Town’s net position by $129,757. Key elements of thisincrease are as follows:

Actual property tax revenue increased by 7.17% or $89,654 compared to the prior year.A 8.96% increase in the existing property values and a millage rate of 1.8700 that was8.47% above the Rolled-Back Rate of 1.7239.

Governmental fund overall revenues remained flat over fiscal year 2015 with a reporteddecrease of $2,481 or .07%. While Ad Valorem increased by $89,654 or 7.17% andother revenue sources such as Licenses and Permits increased significantly by $284,037or 220.75%, Fines increased by $14,790 or 74.44% and Miscellaneous Revenuesincreased by $24,602 or 397.90%, all were offset by a decrease in IntergovernmentalRevenues from Pinellas County by $414,589 or 47.57%.

Local Option Sales Tax decreased 2.6% or $4,571 over the prior year. Utility Taxesincreased 0.74% or $2,740 with the Communications Services Tax decreasing (.49%)or $627 over last year. The Utility Tax and 2.5% of the Communications Services Taxare utilized for the retirement of the long term debt and interest for the placement ofutilities underground within the Town.

Program revenues increased $315,556 primarily due to an increase in building permitsand with small increases in fines assessed by the Town and an increase in charges forPolice services.

Overall revenues increased 0.07% or $2,481 in comparison with the prior year alongwith an increase of 17.04% in expenditures or $535,554 due to a principalpaydown and debt refinancing in comparison with the prior year.

FINANCIAL ANALYSIS OF THE TOWN’S FUNDSAs noted earlier, the Town uses fund accounting to ensure and demonstrate compliance withfinance-related legal requirements.

GOVERNMENTAL FUNDSThe focus of the Town’s governmental fund is to provide a detailed short-term view of theTown’s general government operations. The information helps to determine whether there aremore or fewer financial resources that can be spent in the near future to finance the Town’sprogram. In particular, unassigned fund balance may serve as a useful measure of agovernment’s net resources available for spending at the end of the fiscal year.

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As of the end of fiscal year 2016, the Town’s governmental funds reported ending fundbalances of $2,791,732 a decrease of ($141,416) in comparison with the prior year. There wasa slight decrease in revenue of $2,481 compared to the previous year and expendituresincreased by $535,554.

INTERGOVERNMENTAL REVENUES

2016 2015 2014 2013 2012

Half-Cent Sales Tax $ 89,354 $ 92,759 $ 81,803 $ 79,780 $ 72,534

State Revenue Sharing $ 31,827 $ 31,259 $ 30,188 $ 30,074 $ 30,634

Local Option Gas Tax $ 24,731 $ 24,195 $ 23,295 $ 23,109 $ 22,627

1 Cent Surtax - LOST $174,366 $178,937 $142,068 $145,686 $135,469

100% of Utility taxes and 2.5% of the Communications Services Tax are utilized to fund thelong-term debt payments for the undergrounding of utilities on Gulf Boulevard.

Unassigned fund balance is $2,225,605 and is available for spending at the Town’s discretion.

The remainder of the fund balance $566,127 is non-spendable, restricted or committed and notavailable for new spending and is detailed on page 57 and 58 along with the Reserved PensionTrust Funds.

The total governmental fund expenditures are 49.88% compared to total net assets.

CALCULATION OF ALLOWABLE MAXIMUM MILLAGE

The rolled back rate is the rate that would generate approximately the same tax dollars as theprevious year with the same properties (1.7239). During 2016 the Town was required tocalculate and disclose the allowable Maximum Millage Levy Calculation. The current yearrolled-back rate is allowed to be adjusted by the growth or loss in per capita Florida personalincome that is certified by the Department of Revenue which was 1.0375%. The majorityvote maximum millage rate allowed for the Town of Indian Shores was 2.5547. With a two-thirds vote the maximum millage rate allowed would have been 2.8102. The Town Councilapproved a rate of 1.8700 per $1,000 of valuation which was 8.47% more than the rolledback rate of 1.7239.

For the Fiscal 2016/2017 year the maximum millage rate that can be levied will be calculatedmuch the same as in FY 2015/2016 subject to any legislative changes.

13

The following chart shows the major sources of revenue by percentage. Most of the tax sourcesare not controllable by the Town, because State Statutes set the tax levies but the Town hasmaintained a property tax millage well below the maximum 10 mill statutory rate.

PROPERTY TAXES

38%

FRANCHISE FEES

7%UTILITY TAXES

11%

LICENSES AND PERMITS

12%

INTERGOVERNMENTAL

13%

CHARGES FOR SERVICE

17%

FINES

1%

INVESTMENT INCOME

0%

MISCELLANEOUS

1%

Governmental Funds Revenues by Source

GOVERNMENTAL FUNDS - BUDGETARY HIGHLIGHTS

There were two amendments to the original budget to the final budget as follows:

Budget Amendment # 1 was authorized by Resolution No. 12 – 2016 Parking – Maintenance Repairs $ 4,000 Building – Contractual Services $35,000

The Parking Department was under budgeted.The Building Department required $35,000 to supplement funds for the contractual serviceswith Universal Engineering due to the retirement of the Building Official.Budget Amendment #2 was authorized by Resolution No. 13-2016 Building Department Contractual Services $83,200

The Building Department required funds to pay for the emergency demolition of a propertythat was damaged during Hurricane Hermine.

14

CAPITAL ASSET AND DEBT ADMINISTRATION

CAPITAL ASSETS - GOVERNMENTAL FUNDSThe Town’s investment in capital assets for its governmental activities as of September 30,2016 amounts to $10,183,372 net of accumulated depreciation. This investment in capitalassets includes land, building, improvements other than buildings, and equipment.


Capital Assets

(Net of Accumulated Depreciation)


2016 2015

Land $ 827,462 $ 827,462

Buildings 5,345,398 5,345,398

Improvements other than Buildings 9,186,704 9,186,704

Equipment 739,112 782,236

Construction in progress - -

Less Accumulated Depreciation ( 5,915,304) (4,720,920)

Totals $ 10,183,372 $ 11,296,765

Additional information on the Town’s capital assets can be found on pages 52 and 53 of this report.

LONG-TERM DEBTAt the end of Fiscal Year 2016, the Town had no outstanding general obligation bonds.

On February 15, 2005 the Town issued Revenue Bonds, Series 2005A through the FloridaMunicipal Loan Council in the amount of $5,930,000 for the purpose of undergrounding utilitieswithin the Town. These bonds were paid off in October 2015. The payment for the bonds cameprimarily from a new loan with SunTrust Bank.

On October 6, 2015, the Town Council adopted Resolution 10-2015 to approve a loan agreementwith SunTrust Bank providing for a $4,794,532 loan along with a $500,000 cash contribution bythe Town to refund the Town’s portion of the Florida Municipal Loan Council’s revenue bond,Series 2005A.


Revenue Note 2015 - Principal $ 4,091,596

15

On September 27, 2012 the Town refinanced Municipal Revenue Bonds in the amount of$1,820,000 that was utilized for the construction of a new Municipal Center. During FiscalYear 2015/2016 the Town paid $135,652 towards retirement of the Principal and $40,572 forInterest payments. Debt payments are paid monthly and there is no pre-payment penalty afterfive-years from the date of issue.

Governmental ActivitiesRevenue Note 2012 - Principal $ 1,288,696

The Town has recorded a liability for compensated absences in the amount of $82,419.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The unemployment rate for the County at September 30, 2016 was 4.4 percent which

represents a decrease of 6.82 percent from the prior year. The State rate ofunemployment was 4.9 percent as of September 30, 2016.

The Town of Indian Shores is primarily a residential community with less than 16percent of properties currently claiming Homestead Exemption. Latest report shows443 out of 2802 parcels.

The Town of Indian Shores witnessed new construction costs estimated value of$6,430,006 for the fiscal year ended September 2016. Permit Fees totaled over$411,257 during this time. Due to new construction and increasing values, the Town isin good condition to raise sufficient tax revenue in FY2017 to meet projectedexpenditures without utilizing reserves. With new construction and increased issuancesof Certificates of Occupancy and assessed values of real property continuing to increasewell into 2017, the Town’s ability to provide salary and benefit increases is likely.

The Town issued Revenue Bonds in February 2005 to place all utilities inTown underground with construction being completed in September 2008, thatcarried an initial locked in rate for 10 years. In FY 2016 the Town was able torefinance those bonds at a more favorable interest rate and make a principalreduction payment of $542,550.

This financial report is designed to present users with a general overview ofthe Town’s finances to all those interested in the government finances.Questions concerning any of the information provided in this report or requestfor additional financial information should be addressed to the Town’s FinanceOfficer at 19305 Gulf Blvd., Indian Shores, Florida 33785 or email:[email protected].

BASIC FINANCIAL STATEMENTS

This section contains the following subsections:

Government-Wide Financial Statements

Statement of Net Position

Statement of Activities

Fund Financial Statements

Governmental Fund Financial Statements

Balance Sheet - Governmental Funds

Reconciliation of the Balance Sheet to the Statement of

Net Position - Governmental Funds

Statement of Revenues, Expenditures, and Changes in Fund Balance -

Governmental Funds

Reconciliation of the Statement of Revenues, Expenditures and Changes

in Fund Balance of Governmental Funds to the Statement of Activities -

Governmental Funds

Statement of Revenues, Expenditures, and Changes in Fund Balance -

Budget and Actual:

General Fund

Fiduciary Fund Financial Statements

Statement of Fiduciary Net Position - Fiduciary Fund

Statement of Changes in Fiduciary Net Position - Fiduciary Fund

Notes to Financial Statements

GovernmentalASSETS Activities

Cash and cash equivalents $ 1,751,562

Investments 1,047,404

Receivables (net of allowance for uncollectibles) 136,043

Prepaid items 8,417Capital Assets:

Land 827,462

Buildings 5,345,398

Improvements other than buildings 9,186,704

Equipment 739,112

Accumulated depreciation (5,915,304)

Total Assets 13,126,798

DEFERRED OUTFLOWS OF RESOURCES

Deferred outflows of resources related to

pension plan 170,910

LIABILITIES

Accounts payable 99,226

Accrued payroll 52,468

Accrued interest payable 27,319

Noncurrent liabilities:

Due within one year 384,160

Due in more than one year 5,357,638

Total Liabilities 5,920,811

NET POSITION

Net investment in capital assets 4,803,080

Restricted for:

Police education 2,302

Police equipment 5,783

Unrestricted 2,565,732

Total Net Position $ 7,376,897


STATEMENT OF NET POSITION

SEPTEMBER 30, 2016

See Notes to Financial Statements.

16

Primary

Government

Function/Program Activities

General government $ 980,918

Public Safety 1,416,864

Physical environment 968,659

Culture and recreation 41,333

Total program expenses 3,407,774

Program Revenues:

Charges for services 1,057,138

Capital grants and contributions 1,077

Total program revenues 1,058,215

Net program expenses 2,349,559

GENERAL REVENUES:

Taxes:

Property taxes 1,341,389

Franchise fees 249,676

Utility taxes 374,928

Intergovernmental Revenue:

State revenue sharing 31,827

Half-cent sales tax 89,354

Local option gas tax 24,731

Local option sales tax 174,366

Communications tax 127,913

Other taxes 7,667

Investment income 6,632

Miscellaneous 50,833

Total General Revenues 2,479,316

Change in net position 129,757

Net Position - Beginning 7,247,140

Net Position - Ending $ 7,376,897


STATEMENT OF ACTIVITIES



17

Capital OtherImprovements Governmental

General Fund Fund Fund Total

Cash and cash equivalents $ 1,342,310 $ 371,678 $ 37,574 $ 1,751,562Investments 1,047,404 - - 1,047,404Receivables (net of allowance

for uncollectible accounts):Taxes:

Franchise 22,769 - - 22,769Utility 40,085 - - 40,085

Intergovernmental:State 40,963 - - 40,963County - 28,274 3,952 32,226

Prepaid items 8,417 - - 8,417

TOTAL ASSETS $ 2,501,948 $ 399,952 $ 41,526 $ 2,943,426

LIABILITIES:Accounts payable $ 99,226 $ - $ - $ 99,226Accrued payroll 52,468 - - 52,468

TOTAL LIABILITIES 151,694 - - 151,694

FUND BALANCE:Nonspendable 8,417 - - 8,417Restricted 8,085 399,952 41,526 449,563Committed 108,147 - - 108,147Unassigned 2,225,605 - - 2,225,605

TOTAL FUND BALANCE 2,350,254 399,952 41,526 2,791,732

TOTAL LIABILITIES AND FUND BALANCE $ 2,501,948 $ 399,952 $ 41,526 $ 2,943,426


BALANCE SHEET

SEPTEMBER 30, 2016

GOVERNMENTAL FUNDS

ASSETS

LIABILITIES AND FUND BALANCE


18

Fund balances - total governmental funds $ 2,791,732

Amounts reported for governmental activities in the statement ofnet position are different because:

Capital assets used in governmental activities are not financialresources and therefore are not reported in the governmental funds.

Governmental capital assets $ 16,098,676Less accumulated depreciation (5,915,304)

10,183,372

Deferred outflows of resources related to pension plans 170,910

Long-term liabilities are not due and payable in thecurrent period and therefore are not reportedin the governmental funds.

Other postemployment benefits payable (40,511)Accrued interest payable (27,319)2012 Revenue note payable (1,288,696)2015 Revenue note payable (4,091,596)Net pension liability (238,576)Compensated absences (82,419)

(5,769,117)

Net position of governmental activities $ 7,376,897

SEPTEMBER 30, 2016


19


RECONCILIATION OF THE BALANCE SHEET

TO STATEMENT OF NET POSITION

GOVERNMENTAL FUNDS

Capital OtherGeneral Improvements Governmental

Fund Fund Fund Total

REVENUES:

Taxes:Ad valorem $ 1,341,389 $ - $ - $ 1,341,389Franchise taxes 249,676 - - 249,676Utility taxes 374,928 - - 374,928

Licenses and permits 412,707 - - 412,707Intergovernmental 245,415 174,366 37,154 456,935Charges for services 564,671 - 45,100 609,771Fines 34,660 - - 34,660Interest 6,632 - - 6,632Miscellaneous 30,785 - - 30,785

TOTAL REVENUES 3,260,863 174,366 82,254 3,517,483

EXPENDITURES:Current:

General government 906,179 - - 906,179Public safety 1,330,339 - - 1,330,339Physical environment 167,471 101,617 120,222 389,310Culture and recreation 4,305 - - 4,305

Debt service:Principal - 779,057 - 779,057Interest - 269,757 - 269,757

TOTAL EXPENDITURES 2,408,294 1,150,431 120,222 3,678,947

EXCESS OF REVENUESOVER (UNDER) EXPENDITURES 852,569 (976,065) (37,968) (161,464)

OTHER FINANCING SOURCES (USES):Proceeds from insurance 20,048 - - 20,048Transfers in - 378,126 43,130 421,256Transfers (out) (421,256) - - (421,256)

TOTAL OTHER FINANCING SOURCES (USES) (401,208) 378,126 43,130 20,048

EXCESS OF REVENUES AND OTHER FINANCINGSOURCES OVER EXPENDITURES ANDOTHER FINANCING USES 451,361 (597,939) 5,162 (141,416)

FUND BALANCE,OCTOBER 1 1,898,893 997,891 36,364 2,933,148

FUND BALANCE,SEPTEMBER 30 $ 2,350,254 $ 399,952 $ 41,526 $ 2,791,732


20


STATEMENT OF REVENUES, EXPENDITURES AND

GOVERNMENTAL FUNDS


CHANGES IN FUND BALANCE

Net change in fund balances - total governmental funds $ (141,416)

Amounts reported for governmental activities in the statement ofactivities are different because:

Governmental funds report capital outlays as expenditures.However, in the statement of activities, the cost of those assetsis depreciated over their estimated useful lives.

Expenditures for capital assets $ -Less current year depreciation (617,139)

(617,139)

Deferred outflows of resources related topension plans (114,849)

Some expenses reported in the statement of activities do notrequire the use of current financial resources and therefore arenot reported as expenditures in governmental funds.

Other post-employment benefit costs (9,163)Change in compensated absences 37,864Principal payment on 2012 revenue note 135,652Principal payment on bond 436,469Principal payment on 2015 revenue note 206,936Change in accrued interest expense 142,393Change in net pension liability 53,010

1,003,161

Change in net position of governmental activties $ 129,757


RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES

GOVERNMENTAL FUNDS



21

VarianceWith

Final Budget-Favorable

Original Final Actual Amounts (Unfavorable)Revenues:

Taxes:Ad valorem $ 1,346,441 $ 1,346,441 $ 1,341,389 $ (5,052)Franchise taxes 248,000 248,000 249,676 1,676Utility tax 342,000 342,000 374,928 32,928Licenses and permits 133,000 133,000 412,707 279,707Intergovernmental 246,411 246,411 245,415 (996)Charges for services 544,788 544,788 564,671 19,883Fines 19,500 19,500 34,660 15,160Interest 3,500 3,500 6,632 3,132Miscellaneous 5,501 5,501 30,785 25,284

Total Revenues 2,889,141 2,889,141 3,260,863 371,722

Expenditures:Current:

General Government:Legislative 69,571 69,571 60,170 9,401Financial and administrative 763,969 737,969 714,061 23,908Facilities maintenance 140,080 144,080 131,948 12,132

973,620 951,620 906,179 45,441

Public Safety:Police 1,242,680 1,242,680 1,177,694 64,986Protective inspections 127,294 162,294 152,645 9,649

1,369,974 1,404,974 1,330,339 74,635

Physical Environment:Public Service 189,760 181,760 167,471 14,289

189,760 181,760 167,471 14,289

Culture and Recreation:Library 10,600 5,600 4,305 1,295

10,600 5,600 4,305 1,295

Total Expenditures 2,543,954 2,543,954 2,408,294 135,660

Excess of Revenues Over (Under) Expenditures 345,187 345,187 852,569 507,382

Other Financing Sources (Uses):Proceeds from insurance - - 20,048 20,048Transfer (out) - Road and Bridge Fund (43,130) (43,130) (43,130) -Transfer (out) - Capital Improvements Fund (345,189) (345,189) (378,126) (32,937)

Total Other Financing Sources (Uses) (388,319) (388,319) (401,208) (12,889)

Net Change in Fund Balance (43,132) (43,132) 451,361 494,493

Fund Balance, Beginning of Year 1,898,893 1,898,893 1,898,893 -

Fund Balance, End of Year $ 1,855,761 $ 1,855,761 $ 2,350,254 $ 494,493

Budgeted Amounts


STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -

BUDGET AND ACTUAL


GENERAL FUND


22

Public Safety

Pension Fund

Receivables:

Employer contributions $ 19,946

State excise tax rebate 20,206

Investment income 4,914

Total receivables 45,066

Investments at fair value:

Government obligations 26,853

Corporate obligations 416,400

Municipal bonds 108,273

Domestic stock 1,798,284

Foreign stock 155,665

Temporary investments 278,085

Total investments 2,783,560

Total assets 2,828,626

Accounts payable 4,671

Net position restricted for pension benefits $ 2,823,955


23

Liabilities


STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUND

SEPTEMBER 30, 2016

Assets

Public SafetyPension Fund

ADDITIONS:Contributions:

Employer $ 78,774Plan members 31,776

Total Contributions 110,550

Intergovernmental revenue:State excise tax rebate 20,206

Investment earnings:Interest/dividends 46,901Net appreciation (depreciation) in fair value

of investments 319,501

Investment earnings (loss) 366,402

Less investment expenses 18,049

Net investment earnings (loss) 348,353

Total additions 479,109

DEDUCTIONS:Benefits

Age and service 57,220Disability 11,174Refund of contributions 17,528

Administrative expenses 15,086

Total deductions 101,008

Net increase (decrease) in net position 378,101

Net position restricted for pension benefits:Beginning of year 2,445,854

End of year $ 2,823,955


24


STATEMENT OF CHANGES IN FIDUCIARY NET POSITIONFIDUCIARY FUND


NOTES TO

FINANCIAL STATEMENTS


NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

1. Summary of Significant Accounting Policies

The Town of Indian Shores (Town) maintains its accounting records in accordancewith generally accepted accounting principles (GAAP) as applied to government units. TheGovernmental Accounting Standards Board (GASB) is the accepted standard-setting bodyfor establishing governmental accounting and financial reporting principles. The moresignificant of the Town’s accounting policies are described below:

Reporting Entity - The Town is a political subdivision of the State of Florida, locatedin Pinellas County in the southwest central portion of the State. The Town was incorporatedin 1949. In accordance with the Florida Statutes of 1941, the Town was established pursuantto a special election held on September 16, 1949. The Town’s Charter was revised in 1985and is the same Charter under which the Town currently operates. The Town isapproximately .385 square miles in land area. The Town is a full service municipalityproviding its citizens with a full complement of municipal services except for fire protection.

In evaluating how to define the Town of Indian Shores, Florida (the primarygovernment), for financial reporting purposes, management has considered all potentialcomponent units. The decision as to the inclusion of a component unit in the reporting entitywas made by applying the criteria set forth in GASB Statement No. 14.

This governmental accounting standard requires that this financial statement presentthe Town of Indian Shores (the primary government) and its component units. Componentunits generally are legally separate entities for which a primary government is financiallyaccountable. Financial accountability ordinarily involves meeting both of the followingcriteria: the primary government is accountable for the potential component unit (i.e., theprimary government appoints the voting majority of its board) and the primary governmentis able to impose its will upon the potential component unit, or there is a possibility that thepotential component unit mayprovide specific financial benefits or impose specific financialburdens on the primary government. The policemen’s pension fund is included in thesefinancial statements as a pension trust fund.

25



SEPTEMBER 30, 2016

1. Summary of Significant Accounting Policies (Continued)

Policemen's Pension Fund - The Town's police officers participate in the Policemen'sPension Plan. The Plan functions for the benefit of these employees and is governed by afive-member pension board. Two police officers, two Town residents and a fifth memberelected by the other four members constitute the pension board. The Town and the Planparticipants are obligated to fund all Plan costs based upon actuarial valuations. The Townis authorized to establish benefit levels and to approve the actuarial assumptions used in thedetermination of contribution levels.

Complete financial statements of the above pension fund can be obtained from:

Town of Indian Shores

Director of Finance and Personnel

19305 Gulf Boulevard

Indian Shores, Florida 33785

The Pinellas Suncoast Fire & Rescue District (PSFRD) provides services within the

Town of Indian Shores, but has not been included in the reporting entity because it does not

meet the criteria necessary to be a component unit. The PSFRD elects its own governing

Board, sets its own fee for services schedule and is completely independent of the Town of

Indian Shores.

Government-Wide and Fund Financial Statements - As discussed more fully in

Note 2 the Town has adopted the provisions of GASB Statement No. 34, “Basic Financial

Statements and Management Discussion and Analysis for State and Local Governments.”

The government-wide financial statements (i.e., the statement of net position and the

statement of activities) report information on all of the nonfiduciary activities of the primary

government and its component units. For the most part, the effect of interfund activity has

been removed from these statements. Governmental activities, which normallyare supported

by taxes and intergovernmental revenues, are reported separately from fiduciary funds.

26



SEPTEMBER 30, 2016


The statement of activities demonstrates the degree to which the direct expenses of

a given function or segment are offset by program revenues. Direct expenses are those that

are clearly identifiable with a specific function or segment. Program revenues include 1)

charges to customers or applicants who purchase, use, or directly benefit from goods,

services, or privileges provided by a given function or segment and 2) grants and

contributions that are restricted to meeting the operational or capital requirements of a

particular function or segment. Taxes and other items not properly included among program

revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, and fiduciary

funds, even though the latter are excluded from the government-wide financial statements.

Major individual governmental funds and major individual enterprise funds are reported as

separate columns in the fund financial statements.

Since the governmental fund financial statements are presented on a different

measurement focus and basis of accounting than the government-wide statements’

governmental activities column, a reconciliation is presented on the same page or the page

following each statement, which briefly explains the adjustments necessary to reconcile the

fund based financial statements to the governmental activities column of the government-

wide presentation.

The Town’s fiduciary funds are presented in the fund financial statements by type

(pension). Since by definition these assets are being held for the benefit of a third-party

(pension participants) and cannot be used to address activities or obligations of the

government, these funds are not incorporated into the government-wide statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation -

The government-wide financial statements are reported using the economic resources

measurement focus and the accrual basis of accounting, as are the fiduciary fund financial

statements. Revenues are recorded when earned and expenses are recorded when a liability

is incurred, regardless of the timing of related cash flows. Property taxes are recognized as

revenues in the year for which they are levied. Grants and similar items are recognized as

revenue as soon as all eligibility requirements imposed by the provider have been met.

27



SEPTEMBER 30, 2016


Governmental fund financial statements are reported using the current financial

resources measurement focus and the modified accrual basis of accounting. Revenues are

recognized as soon as they are both measurable and available. Revenues are considered to

be available when they are collectible within the current period or soon enough thereafter to

pay liabilities of the current period. For this purpose, the government considers revenues to

be available if they are collected within 60 days of the end of the current fiscal period.

Expenditures generallyare recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures, as well as expenditures related to compensated absences

and claims and judgments, are recorded only when payment is due.

Franchise taxes, licenses, and interest associated with the current fiscal period are allconsidered to be susceptible to accrual and so have been recognized as revenues of thecurrent fiscal period. All other revenue items are considered to be measurable and availableonly when cash is received by the Town.

The Town reports the following major governmental funds:

The General Fund is the government’s primary operating fund. It accountsfor all financial resources of the general government, except those requiredto be accounted for in another fund.

The Capital Improvements Fund accounts for the capital projects funded bythe infrastructure sales surtax.

Additionally, the Town reports the following fund type:

The Pension Trust Fund account for the activities of the Public SafetySystem, which accumulates resources for pension benefit payments toqualified public safety employees.

28



SEPTEMBER 30, 2016


Private-sector standards of accounting and financial reporting issued prior toDecember 1, 1989, generally are followed in both the government-wide and proprietary fundfinancial statements to the extent that those standards do not conflict with or contradictguidance of the Governmental Accounting Standards Board. Governments also have theoption of following subsequent private-sector guidance for their business-type activities andenterprise funds, subject to this same limitation. The government has elected not to followsubsequent private-sector guidance.

As a general rule the effect of interfund activity has been eliminated from the

government-wide financial statements. Exceptions to this general rule are payments-in-lieu

of taxes and other charges between the government’s administrative function and various

other functions of the government. Elimination of these charges would distort the direct cost

and program revenues reported for the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants

for goods, services, or privileges provided, 2) operating grants and contributions, and 3)

capital grants and contributions, including special assessments. Internally dedicated

resources are reported as general revenues rather than as program revenues. Likewise,

general revenues include all taxes.

When both restricted and unrestricted resources are available for use, it is the Town’s

policy to use restricted resources first, then unrestricted resources as they are needed.

Establishment/Elimination of Funds

No funds were established or eliminated during the fiscal year ended September 30,

2016.

29



SEPTEMBER 30, 2016


Assets, Liabilities, and Net Position/Equity:

Deposits and investments - The Town’s cash and cash equivalents are considered tobe cash on hand, demand deposits, and short-term investments with original maturities ofthree months or less from the date of acquisition.

The Town's investment policy is to maintain funds in investments which yield thehighest possible efficiency and return within the limitations established by Florida Statutes,Chapter 218.415. Provisions of those statutes authorize the Town to invest in:

a) Florida State Board of Administration Local Government PooledInvestment Fund.

b) Bonds, notes or other obligations of the United States or for which thecredit of the United States is pledged for the payment thereof.

c) Interest-bearing time deposits, savings accounts or collective investmentfunds in banks or savings and loan associations organized under the lawsof the United States.

d) Obligations of the federal farm credit banks and the Federal Home LoanMortgage Corporation.

e) Obligations of the Federal National Mortgage Association and theGovernment National Mortgage Association.

Investments in fixed income securities are stated at fair value. Fair value is the

amount at which an investment could be exchanged in a current transaction between willing

parties, other than in a forced or liquidation sale.

The Florida State Board of Administration Local Government Pooled Investment

Fund has met the criteria to be considered a “2A-7 like” Investment Fund as defined by

GASB Statement No. 31. Therefore, amortized cost may be used for valuation. The fair

value of the Town’s investment in this pool is determined by the pool’s share price (account

balance).

30



SEPTEMBER 30, 2016


Investments held by the Town’s pension trust fund are reported at fair value. Short-term investments are reported at amortized cost, which approximates fair value. Securitiestraded on national exchanges are valued at the last reported sales price. Investments that donot have an established market are reported at estimated fair values.

The Domestic and Foreign Stocks, Corporate Bonds, Municipal and U.S.Government Obligations and Temporary Investment Funds are assets of the Policemen’sPension Trust Fund (Plan) and are reported at fair value. These securities are held by thePlan’s agent in the Plan’s name. The Temporary Investment funds are open end funds andare not subject to categorization.

The ICMA Investment Fund is an asset of the Employees’ Pension Trust Fund andis reported at fair value. The ICMA Investment Fund is an open-end fund and providesmanagement of commingled retirement plan funds for the defined contribution planadministered bythe ICMA Retirement Corporation. The Retirement Corporation administersqualified money purchase pension plans for state and local governments andinstrumentalities.

Receivables and payables - Activity between funds that are representative oflending/borrowing arrangements outstanding at the end of the fiscal year are referred to aseither “due to/from other funds” (i.e., the current portion of interfund loans) or “advancesto/from other funds” (i.e., the non-current portion of interfund loans). All other outstandingbalances between funds are reported as “due to/from other funds.” Any residual balancesoutstanding between the governmental activities and business-type activities are reported inthe government-wide financial statements as “internal balances.”

Advances between funds, as reported in the fund financial statements, are offset bya fund balance reserve account in applicable governmental funds to indicate that they are notavailable for appropriation and are not expendable available financial resources.

All tax, accounts and intergovernmental receivables are shown net of an allowancefor uncollectibles.

31



SEPTEMBER 30, 2016


Property Taxes - Under Florida law, the assessment of all properties and thecollection of all county, municipal and school board property taxes are consolidated in theoffices of the County Property Appraiser and County Tax Collector.

The tax levy of the Town is established by the Town Council prior to October 1 ofeach year and the Pinellas County Property Appraiser incorporates the Town’s millages intothe total tax levy, which includes the Pinellas County School Board tax requirements. TheTown is permitted by state law to levy taxes up to ten mills of assessed valuation, exclusiveof taxes levied for the payment of bonds. The 2016 millage rate assessed by the Town was1.8700.

All property is reassessed according to its fair market value January 1 of each year.Each assessment roll is submitted to the Executive Director of the State Department ofRevenue for review to determine if the rolls meet all of the appropriate requirements of Statestatutes.

All taxes are due and payable on November 1 of each year or as soon thereafter as theassessment roll is certified and delivered to the Tax Collector. All unpaid taxes becomedelinquent on April 1 following the year in which they are assessed. Discounts are allowedfor early payment at the rate of 4% in the month of November, 3% in the month ofDecember, 2% in the month of January and 1% in the month of February. The taxes paid inMarch are without discount.

Delinquent taxes on real property bear interest at 18% per year. On or prior to June 1following the tax year, certificates are sold for all delinquent taxes on property. After sale,tax certificates bear interest at 18% per year or at any lower rate bid by the buyer.Application for a tax deed on any unredeemed tax certificates may be made by the certificateholder after a period of two years.

Delinquent taxes on personal property bear interest at 18% per year until the tax issatisfied either by seizure and sale of the property or by the five-year statute of limitations.

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SEPTEMBER 30, 2016


Because of the Pinellas County Tax Collector's Office efficient system for selling tax

certificates and remitting the proceeds to the Town any delinquent or uncollected property

taxes at year end are immaterial. The Town's tax calendar is as follows:

Valuation Date: January 1

Levy Date: November 1

Due Date: March 31, succeeding year

Lien Date: April 1, succeeding year

Capital Assets - Capital assets, which include property, plant, equipment, and

infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the

applicable governmental or business-type activities columns in the government-wide

financial statements. Capital assets are defined by the government as assets with an initial,

individual cost of more than $5,000 (amount not rounded) and an estimated useful life in

excess of two years. Such assets are recorded at historical cost or estimated historical cost

if purchased or constructed. Donated capital assets are recorded at estimated fair market

value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset

or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are

constructed. Interest incurred, if any, during the construction phase of capital assets of

business-type activities is included as part of the capitalized value of the assets constructed.

Property, plant, and equipment of the primary government, as well as the component

units, is depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings 45-55

Building improvements 20-30

Public domain infrastructure 45-55

Machinery and equipment 5-15

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SEPTEMBER 30, 2016


Long-term Obligations - In the government-wide financial statements, and proprietary

fund types in the fund financial statements, long-term debt and other long-term obligations

are reported as liabilities in the applicable governmental activities, business-type activities,

or proprietary fund type statement of net assets.

Net Position - Net position of the government-wide fund represent the difference between

assets and liabilities. Net investment in capital assets, net of related debt consists of capital assets

net of accumulated depreciation and the outstanding balance on any borrowing spent for acquisition,

construction or improvements of those assets. Net position is reported as restricted when there are

limitations imposed on their use either through the enabling legislation adopted by the Council or

through external restrictions imposed by creditors, grantors or laws or regulations of other

governments.

Nature and Purpose of Classifications of Fund Equity - In the fund financial statements,

governmental funds report fund classifications that comprise a hierarchy based primarily on the

extent to which the Town is bound to honor constraints on the specific purposes for which amounts

in those funds can be spent. Amounts that are restricted to specific purposes either by

a) constraints placed on the use of resources by creditors, grantors, contributors, or laws or

regulations of other governments or

b) imposed by law through constitutional provisions or enabling legislation are classified as

restricted fund balances.

Amounts that can only be used for specific purposes pursuant to constraints imposed by the Town

Council through a resolution are classified as committed fund balances. Amounts that are

constrained by the Town’s intent to be used for specific purposes but are not either restricted nor

committed are classified as assigned fund balances. Assignments are made by the Town

management based on Council direction. Non-spendable fund balances include amounts that cannot

be spent because they are either (a) not in spendable form or (b) legally or contractually required to

be maintained intact. Unassigned fund balance represents fund balance that has not been assigned

to other funds and that has not been restricted, committed, or assigned to specific purposes within

the governmental funds.

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SEPTEMBER 30, 2016


Fund Balance/ Net Position Policy

The Town hereby establishes and will maintain Fund Balance/Net Position, as defined

herein, in accordance with Governmental Accounting and Financial Standards Board

Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Fund

Balance shall be composed of non-spendable, restricted, committed, assigned and unassigned

amounts.

A Fund Balance Policy/Net Position is adopted in order to secure and maintain

investment-grade credit ratings, meet seasonal shortfalls in cash flow, and reduce

susceptibility to emergency or unanticipated expenditures and/or revenue shortfalls. Fund

balance information is used to identify the available resources to repay long-term debt,

reduce property taxes, add new governmental programs, expand existing ones, or enhance

the financial position of the Town, in accordance with policies established by the Town

Council.

This Fund Balance/Net Position Policy establishes:

a. Fund balance policy for the General Fund;

b. The method of budgeting the amount of estimated unrestricted fund balance

(also known as estimated beginning fund balance) available for appropriation

during the annual budget adoption process (prior to the actual, audited fund

balance being known) and what actions may need to be taken if the actual fund

balance is significantly different than the budgeted fund balance; and

c. Establish the spending order of fund balances.

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SEPTEMBER 30, 2016


RESTRICTED

Amounts that can be spent only for specific purposes stipulated by (a) external resource

providers such as creditors (by debt covenants), grantors, contributors, or laws or

regulations of other governments; or (b) imposed by law through constitutional

provisions or enabling legislation will be budgeted and reported in specific revenue

funds, capital project funds or debt service funds.

COMMITTED

This component may be made for such purposes including, but not limited to: a) major

maintenance and repair projects; b) meeting future obligations resulting from a natural

disaster; c) accumulating resources pursuant to stabilization arrangements; d) establishing

reserves for disasters; and/or e) for setting aside amounts for specific projects.

ASSIGNED

This component may be: a) made for a specific purpose that is narrower than the general

purposes of the government itself; and/or b) used to reflect the appropriation of a portion

of existing unassigned fund balance to eliminate a projected deficit in the subsequent

year’s budget in an amount no greater than the projected excess of expected expenditures

over expected revenues.

Assigned fund balance shall reflect management’s intended use of resources as set forth

in the annual budget (and any amendments thereto). Assigned fund balance may or may

not be appropriated for expenditure in the subsequent year depending on the timing of

the project/reserve for which it was assigned.

UNASSIGNED

This classification represents amounts that have not been restricted, committed or

assigned to specific purposes withing the general fund. The general fund is the only fund

that reports a positive unassigned fund balance amount. Other governmental funds

besides the general fund can only report a negative unassigned fund balance amount.

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SEPTEMBER 30, 2016


UNASSIGNED (Continued)

When both restricted and unrestricted resources are available for use, it is the Town’s

policy to use restricted resources first, then unrestricted resources (committed, assigned

and unassigned) as they are needed. When unrestricted resources (committed, assigned

and unassigned) are available for use it is the Town’s policy to use committed resources

first, then assigned, and then unassigned as they are needed.

NON-SPENDABLE

This component is established to report items that are not expected to be converted to

cash such as inventory and pre-paid items; items not currently in cash form such as long-

term amounts of loans and notes receivable as well as property acquired for resale; and,

items legally or contractually required to be maintained intact such as the corpus (or

principle) of a permanent fund.

MINIMUM LEVEL OF UNASSIGNED FUND BALANCE

Unassigned fund balance is the residual classification for general fund and represents

fund balance that has not been restricted, committed or assigned by specific purposes

withing the general fund.

If, after the annual audit, prior or committed or assigned fund balance causes the

unassigned fund balance to fall below 30% of general fund operating expenditures, the

Town Administrator will also advise Town Council in order for the necessary action to

be taken to restore the unassigned fund balance to 30% of General Fund operating

expenditures.

The Town Administrator will prepare and submit a plan for committed and/or assigned

fund balance reduction, expenditure reductions and/or revenue increases to Town

Council. The Town shall take action necessary to restore the unassigned fund balance

to acceptable levels within two years.

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SEPTEMBER 30, 2016


Accrued Leave - Regular, full-time, permanent employees (general employees) earn

vacation, sick leave, holidays and, prior to October 1, 1988 and after June 13, 1991,

compensatory time, starting with the first day of employment. Part-time and temporary

employees do not earn or accrue any vacation, sick leave or any other leave, except as may

be approved by the Town Council.

Vacation Leave:

Vacation leave is earned based on years of fully completed service as follows:

Leave Earned

Years of Completed Service Per Biweekly Pay Period

Less than 5 4 hours

At least 5 but less than 10 5 hours



20 years and over 8 hours

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SEPTEMBER 30, 2016


The Town Administrator, Town Clerk, Director of Finance and Personnel, and all

other Department Heads earn vacation leave at the rate of six (6) hours per bi-weekly period,

or in accordance with the appropriate rate based on length of service, whichever is greater.

A maximum of two hundred forty hours or thirty working days may be carried over

from one fiscal year to the next. An employee who has served six months or more may take

vacation leave. Every eligible full-time employee is required to take at least sixty-four hours

of vacation leave within each fiscal year. At the end of the fiscal year or when an employee

is to be terminated without prejudice, the employee may (contingent upon the approval of

the Department Head, Town Administrator, Town Clerk, and Director of Finance and

Personnel), take all, or any portion, of his accrued vacation leave subject to the following

limitations. Leaves by Department Heads must be approved by the Director of Finance and

Personnel. Anyvacation leave bya Department Head which will contribute to exceeding one

hundred twenty hours taken within a period of ninety consecutive calendar days requires the

approval of the appropriate Town committee responsible to the Town Council for that

department (responsible committee). However, if an employee is being terminated without

prejudice, the one hundred twenty hour limitation does not apply.

An employee who terminates employment "without prejudice" is paid for anyunusedvacation leave accumulated to the time of termination. An employee who does not performsatisfactorily in accordance with the Town's standards will be terminated "with prejudice."Any employees terminated with prejudice may lose all accrued vacation leave. Each casewill be reviewed by the responsible committee.

Sick Leave:

Sick leave is earned based on length of completed, fully compensated service asfollows:

Leave EarnedYears of Completed Service Per Biweekly Pay Period

Less than 15 4 hours = 13 Working Days/Year15 years and over 6 hours = 18 Working Days/Year

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SEPTEMBER 30, 2016


The Town Administrator, Town Clerk, Director of Finance and Personnel and all

other Administrators shall earn sick leave at the rate of six (6) hours per bi-weekly period.

An employee who does not use all of his or her accrued sick leave by the end of the

twenty-sixth (26th) bi-weekly period in any fiscal year may carry forward to the next fiscal

year up to eight hundred (800) hours of unused sick leave, plus one year’s sick leave for

potential use to allow them to remain at the 800 hours level for cash-out purposes.

Any employee who separates employment from the Town other than for cause and

who, at the time of separation has 800 accrued hours of sick leave, will be paid for one

hundred and forty (140) hours.

Holiday Hours:

Holiday hours are accrued when full-time employees are unable to take a holiday on

its designated calendar date or an alternate date within the calendar year. An alternate date

is granted to observe the holiday which occurred either on regularly scheduled days off or on

scheduled duty days. Since the alternate holiday date is compensated, employees who work

on holidays are paid their regular compensation for the holiday, not overtime.

Bargaining unit employees shall receive eight hours of pay for all official paid

holidays. Those employees who are required to work on holidays will be compensated at a

shift premium rate of two times their regular rate of pay for each hour worked.

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SEPTEMBER 30, 2016


Compensatory Time:

Compensatory time (comp time) is earned at a maximum rate of one and one-half

hours of comp time for each hour of overtime and for general employees may be carried

forward from one calendar year to the next. The maximum amount of comp time that can

be accrued by a general employee is two hundred and forty hours. In accordance with their

union agreement, police officers are paid overtime for any hours worked over eighty hours

biweekly and do not earn comp time. The Town Administrator, Town Clerk, Director of

Finance and Personnel, and all Department Heads are not eligible to earn comp time.

Accrued comp time can be converted to a monetary payment only when an employee

terminates, and only if the Department Head is unable to give said employee an adequate

number of paid hours off.

Vested or accumulated accrued leave that is expected to be liquidated with

expendable available financial resources is reported as an expenditure and a fund liability of

the governmental fund that will pay it. Amounts of vested or accumulated accrued leave that

are not expected to be liquidated with expendable available financial resources are reported

in the general long-term debt account group. No expenditure is reported for these amounts.

Deferred Outflows of Resources/Deferred Inflows of Resources -Government Accounting

Standards Board (GASB) Concept Statement No. 4, “Elements of Financial Statements”, introduced

two new elements of the financial statements in addition to Assets, Liabilities and Net Assets

(changed to Net Position) which are:

Deferred Outflows of Resources is a consumption of net assets by the government that is

applicable to a future reporting period.

Deferred Inflows of Resources is an acquisition of net assets by the government that is

applicable to a future reporting period.

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SEPTEMBER 30, 2016


Government Accounting Standards Board (GASB) Statement No. 63, “Financial Reporting

of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position” provide

financial reporting guidance for Deferred Outflows of Resources and Deferred Inflows of Resources

and also identifies Net Position (replacing Net Assets) as the residual of all the elements (Assets,

Deferred Outflows of Resources, Liabilities and Deferred Inflow of Resources) presented in a

statement of financial position.

Government Accounting Standards Board (GASB) Statement No. 65, “Items Previously

Reported as Assets and Liabilities” establishes accounting and financial reporting standards that

reclassify, as deferred outflows of resources or deferred inflow of resources, certain items that were

previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of

resources, certain items that were previously reported as assets and liabilities.

The Town has the following items that qualify for reporting in this category:

A. Pension contributions after measurement date. These contributions are

deferred and recognized in the following fiscal year.

B. Difference in projected and actual earning on pension assets - This

difference is deferred and amortized over a closed five year period.

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SEPTEMBER 30, 2016


Net Position:

The government-wide and business-type fund financial statements utilize a net position

presentation. Net position is presented in three components - net investment in capital assets,

restricted and unrestricted.

Net Investment in Capital Assets - This component of net position consists of capital assets,

net of accumulated depreciation and reduced by the outstanding balances of any bonds,

notes or other borrowings attributable to the acquisition, construction, or improvement of

those assets. This component does not include the portion of debt attributable to the unspent

proceeds.

Restricted - This component consists of net position that have constraints placed on them

either externally by third-parties (creditors, grantors, contributors, or law or regulations of

other governments) or by law through constitutional provisions or enabling legislation.

Unrestricted - This component consists of net position that does not meet the definition of

“net investment in capital assets” and “restricted”.

When both restricted and unrestricted resources are available for use, it is the Town’s policy

to use restricted resources first, then unrestricted resources as they are needed.

Fund Balance:

In the fund financial statements, fund balance for governmental funds is reported in

classifications that comprise a hierarchy based primarily on the extent to which the Town is bound

to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund

balance is reported in five components - nonspendable, restricted, committed, assigned and

unassigned.

Subsequent Events - Management has adopted the provisions set forth in GASB

Statement No. 56, Subsequent Events, and considered subsequent events through the date of

the audit report.

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SEPTEMBER 30, 2016

2. Stewardship, Compliance, and Accountability

Budget Information - Annual budgets are adopted on a basis consistent with

generally accepted accounting principles for the general fund and the enterprise funds and

are controlled on a fund and department level. On or before May 31 of each year, all

departments of the Town submit requests for appropriation to the Finance Officer so that a

budget may be prepared. The budget is prepared by fund, function and activity, and includes

information on the past year, current year estimates and requested appropriations for the next

fiscal year. All annual appropriations lapse at fiscal year-end.

The proposed budget is presented by the Mayor to the Town Council for review

on or before July 1. The Town Council holds public hearings and may add to, subtract from,

or change appropriations, but may not change the form of the budget. Any changes in the

budget must be within the revenues and reserves estimated as available by the Finance

Officer or the revenue estimates must be changed by an affirmative vote of a majority of the

Town Council.

Expenditures may not legally exceed budgeted appropriations at the

departmental level. During the year two supplementary appropriations were necessary.

Encumbrances accounting is employed in governmental funds. Encumbrances

(e.g., purchase orders, contracts) outstanding at year end do not constitute expenditures or

liabilities because the commitments will be reappropriated and honored during the

subsequent year.

3. Cash and Cash Equivalents

The Town maintains a cash pool that is available for use by all funds. Each

fund's portion of this pool is displayed as "Cash and Cash Equivalents". In addition,

investments are separately held by several of the Town's funds.

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SEPTEMBER 30, 2016

4. Deposits

At year-end the carrying amount of the Town's deposits was $1,751,562 and thebank balance was $1,734,943. The bank balance was covered byfederal depository insuranceand, for the amount in excess of such federal depository insurance, by the State of Florida'sSecurity for Public Deposits Act. Provisions of the Act require that public deposits may onlybe made at qualified public depositories. The Act requires each qualified public depositoryto deposit with the State Treasurer eligible collateral equal to or in excess of the requiredcollateral as determined by the provisions of the Act. In the event of a failure by a qualifiedpublic depository, losses in excess of federal depository insurance and proceeds from the saleof the securities pledged by the defaulting depository, are assessed against the other qualifiedpublic depositories of the same type as the depository in default.

5. Investments

The Town's investments are categorized as insured or registered or for whichthe securities are held by the Town or its agent in the Town's name. Investments that are notevidenced bysecurities that exist in physical or book-entry form include investments in open-ended mutual funds and pools managed by other governments.

Investments held by Town: Fair ValueBondRating

WeightedAverage Duration

in Years

Florida Cooperative Liquid

Asset Securities System $ 55,602 Not Rated Open-Ended

FMIVT Portfolio 991,802 Not Rated N/A

Investments held by Pension Trust Fund:

Domestic Stock 1,798,284 N/A N/A

Foreign Stock 155,665 N/A N/A

Corporate Obligations 416,400 AA 3.81

Municipal Bonds 108,273 AA 2.74

Government obligations 26,853 N/A N/A

Temporary Investments 278,085 AA N/A

Total investments $ 3,830,964

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SEPTEMBER 30, 2016

5. Investments (Continued)

Interest Rate Risk - The Town manages its exposure to fair value losses arisingfrom increasing interest rates through its adopted investment policies. The Town limits theeffective duration of its investment portfolio through the adoption of nationally recognizedrisk measure bench marks.

Credit Risk - Consistent with state law the Town’s investment guidelines limitits fixed income investments to a quality rating of ‘A’ or equivalent as rated by one or morerecognized bond rating service at the time of purchase. Fixed income investments which aredowngraded to ‘BAA’ or equivalent must be liquidated within a reasonable period of timenot to exceed twelve months. Fixed income investments which are downgraded below‘BAA’ shall be liquidated immediately.

The common stocks, corporate obligations, and temporary investment funds areassets of the Policemen’s Pension Fund held by the Fund’s agent in the Funds name.Accrued interest is not shown under a separate balance sheet account for the investment inthe Florida Local Government Pooled Investment Fund as it is carried at fair value.

Policemen’s Pension Fund

The Board for the Policemen’s Pension Fund has adopted an Investment Policy that

is in accordance with Chapter 185 of the Florida Statutes.

Investments in foreign securities are denominated in United States currency.

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SEPTEMBER 30, 2016

6. Investment Measurement at Fair Value

Fair Value Hierarchy

The accounting standards break down the fair value hierarchy into three levels based

on how observable the inputs are that make up the valuation. The most observable inputs

are classified as Level 1 where the unobservable inputs are classified as Level 3.

Level 1 inputs to the valuation methodology are unadjusted quoted prices for

identical assets or liabilities in active markets that the Plan has the ability to access.

As a general rule, any asset that has a daily closing price and is actively traded will

be classified as a Level 1 input.

Level 2 inputs are inputs (other than quoted prices included within Level 1) that are

observable for the asset or liability, either directly or indirectly. Inputs to the valuation

methodology include: (1) quoted market prices for similar assets or liabilities in active

markets, (2) quoted prices for identical or similar assets or liabilities in active markets, (3)

inputs other than quoted prices that are observable for the asset or liability, and (4) inputs

that are derived principally from or corroborated by observable market data by correlation

or other means. If the asset or liability has a specified (contractual) term, the Level 2 input

must be observable for substantially the full term of the asset or liability.

As a general rule, if an asset or liability does not fall into the requirements of a Level 1 or

Level 3 input, it would default to Level 2. With Level 2 inputs, there is usually data that can

be easily obtained to support the valuation, even though it is not as easily obtained as a

Level 1 input would be.

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SEPTEMBER 30, 2016

6. Investment Measurement at Fair Value (Continued)

Fair Value Hierarchy (Continued)

Level 3 inputs to the valuation methodology are unobservable and significant to the fair

value measurement.

As a general rule, Level 3 inputs are those that are difficult to obtain on a regular basis and

require verification from an outside party, such as an auditor or an appraisal, to validate the

valuation.

Net asset value (NAV) is a common measurement of fair value for Level 1, Level 2,

and Level 3 investments. A fund’s NAV is simply its assets less its liabilities, and is

often reported as a per share amount for fair value measurement purposes. The Plan

would multiply the NAV per share owned to arrive at fair value. Level 1 investment

in funds such as mutual funds report at a daily NAV per share and are actively traded.

NAV also comes in to play for Level 2 and 3 investments. As a matter of

convenience (or referred to in accounting literature as a “practical expedient”), a

Plan can use the NAV per share for investments in a nongovernmental entity that

does not have a readily determined fair value, such as an alternative investment.

Investments measured at NAV as a practical expedient would be excluded from the

fair value hierarchy because the valuation is not based on actual market inputs but

rather is quantified using the fund’s reported NAV as a matter of convenience.

The Plan categorizes its fair value measurement within the fair value hierarchy

established by generally accepted accounting principles. The Plan has the following

total recurring fair value measurements as of September 30, 2016 and 2015:

• Debt securities - Debt securities classified in Level 1or Level 2 of the fair

value hierarchy are valued using prices quoted in active markets for those

securities. Debt securities classified in Level 2 of the fair value hierarchy are

valued using a matrix pricing technique. Matrix pricing is used byInternational

Data Pricing and Reference Data, LLC to value securities based on the

securities' relationship to benchmark quoted prices.

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SEPTEMBER 30, 2016



• Mutual funds - The rationale for inclusion in Level 1 or Level 2 points to the

unobservable inputs involved in mutual fund pricing. Mutual funds do not trade using

bid and ask, as with ETF’s or common stock. Instead, the prices are determined by

the net asset value of the underlying investments at the close of business for the next

day’s open. The underlying assets themselves may include a variety of Level 1 and

Level 2 securities and some may be valued using matrix pricing which interpolates the

price of a security based on the price of similar securities.

• Fixed income funds - Valued using pricing models maximizing the use of observable

input for similar securities. This includes basing value on yield currently available

on comparable securities of issues with similar credit ratings.

• Equity funds - Valued at market prices for similar assets in active markets.

• Common stock - Valued at quoted market prices for identical assets in active markets.

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SEPTEMBER 30, 2016



Fair Value Measurements Using

Quoted

Prices in

Active Significant

Markets Other Significant

for Identical Observable Unobservable

September 30, Assets Inputs Inputs

Investments by fair value level 2016 (Level 1) (Level 2) (Level 3)

Government obligations $ 26,853 $ - $ 26,853 $ -

Corporate obligations 416,400 - 416,400 -

Municipal bonds 108,273 - 108,273 -

Domestic stocks 1,798,284 1,798,284 - -

Foreign stocks 155,665 155,665 - -

Temporary investments 278,085 278,085 - -

Florida Cooperative Liquid

Assets Securities System 55,602 - 55,602 -

FMIVT portfolio 991,802 - 991,802 -

Total investment measured

by fair value level $ 3,830,964 $ 2,232,034 $ 1,598,930 $ -

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SEPTEMBER 30, 2016

7. Receivables

Receivables at September 30, 2016, consist of the following:

General

Fund

Pension

Trust

Fund

Capital

Improvement

Fund

Road and

Bridge

Fund Total

Receivables:

Taxes $ 62,854 $ - $ - $ - $ 62,854

Accounts - 24,860 - - 24,860

Intergovernmental 40,963 20,206 28,274 3,952 93,395

Gross receivables 103,817 45,066 28,274 3,952 181,109

Less: Allowance for

uncollectibles - - - - -

Net total receivables $ 103,817 $ 45,066 $ 28,274 $ 3,952 $ 181,109

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SEPTEMBER 30, 2016

8. Capital Assets

Capital assets activity for the year ended September 30, 2016 was as follows:

Balance Balance

October 1, September 30,

Governmental activities: 2015 Increases Decreases 2016

Capital assets, not being depreciated:

Land $ 827,462 $ - $ - $ 827,462

Construction in progress - - - -

Total capital assets, not being depreciated 827,462 - - 827,4620

Capital assets, being depreciated: 0 8

Buildings 5,345,398 - - 5,345,398

Improvements other than buildings 9,186,704 - - 9,186,704

Equipment 782,236 - (43,124) 739,112

Total capital assets, being depreciated 15,314,338 - (43,124) 15,357,462

Less accumulated depreciation for:

Buildings (637,673) (111,992) - (749,665)

Improvements other than buildings (4,166,392) (452,314) - (4,618,706)Equipment (531,586) (52,833) 37,486 (546,933)

Total accumulated depreciation (5,335,651) (617,139) 37,486 (5,915,304)

Total capital assets, being depreciated, net 9,978,687 (617,139) (5,638) 9,355,910

Governmental activities

Capital assets, net $ 10,806,149 $ (617,139) $ (5,638) $ 10,183,372

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SEPTEMBER 30, 2016

8. Capital Assets (Continued)

Depreciation expense was charged to functions/programs of the primary government

as follows:

Governmental activities:

General government $ 117,256

Public safety 24,686

Physical environment 438,169

Culture and recreation 37,028

Total depreciation expenses - governmental activities $ 617,139

9. Interfund Transfers

Transfers were made from the General Fund to subsidize the budgeted operations of

the other funds for the fiscal year ended September 30, 2016 as follows:

Transfers Transfers

In Out

General Fund $ - $ 421,256

Road and Bridge Fund 43,130 -

Capital Improvement Fund 378,126 -

Total $ 421,256 $ 421,256

10. Risk Management

The Town is exposed to various risks of loss related to torts; theft of, damage to,and distribution of assets; errors and omissions; injuries to employees; and natural disasters.

The Town continues to carry commercial insurance for risks of loss includinghealth, building and contents, employee and police bonds, mobile property, flood andemployee accident insurance. Settled claims from these risks have not exceeded commercialinsurance coverage in any of the past three fiscal years. The Town has not had any significantcoverage reductions under these policies from the prior years.

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SEPTEMBER 30, 2016

11. Long-Term Debt

Changes in long-term liabilities

Long-term liability activity for the fiscal year ended September 30, 2016 was asfollows:

Beginning Ending Due Within

Balance Additions Reductions Balance One Year


Compensated absences $ 120,283 $ 190,609 $ 228,473 $ 82,419 $ 20,605

Bonds 4,735,000 - 4,735,000 - -

Other postemployment

benefits 31,348 9,163 - 40,511 -

Revenue note, 2012 1,424,348 - 135,652 1,288,696 135,652

Revenue note, 2015 - 4,298,532 206,936 4,091,596 227,903

Net pension liability 291,586 - 53,010 238,576 -

Governmental activity

long-term liabilities $ 6,602,565 $ 4,498,304 $ 5,359,071 $ 5,741,798 $ 384,160

Compensated absences are generally liquidated by the General Fund for GovernmentalActivities.

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SEPTEMBER 30, 2016

11. Long-Term Debt (Continued)

Changes in long-term liabilities (Continued)

On February 15, 2005 the Town issued bonds through the Florida Municipal LoanCouncil. The purpose of this debt was to fund the Town’s undergrounding project. Therepayment terms are as follows:

Original Amount Issued: $5,930,000Final Maturity: February 1, 2035Interest Rate: 3.0% to 5.0%Annual Principal Payments: $100,000 to $360,000Amount Outstanding atSeptember 30, 2016: $ -0-

These bonds were paid off in October 2015. The payment for the bonds came primarily

from a new loan with SunTrust Bank.

Revenue Note, Series 2015

On October 6, 2015, the Town Council adopted Resolution 10-2015 to approve a loanagreement with Suntrust Bank providing for a $4,794,532 loan along with a $500,000 cashcontribution by the Town to refund the Town’s portion of the Florida Municipal LoanCouncil’s revenue bond, Series 2005A. The original purpose of this debt was to fund theTown’s undergrounding project. The repayment terms are as follows:

Term: October 8, 2015 through February 1, 2030Annual Principal Payments: $206,936 to $363,370Interest Rate: 3.60%Amount outstanding at

September 30, 2016: $4,091,596

55



SEPTEMBER 30, 2016



Debt service requirements to maturity are as follows:

Principal Interest

2017 $ 227,903 $ 143,195

2018 239,351 134,784

2019 244,943 126,067

2020 255,450 117,060

2020-2025 1,425,544 437,639

2026-2030 1,698,405 157,187

$ 4,091,596 $ 1,115,932

Revenue Note, Series 2012

On September 19, 2012, the Town Council adopted Resolution 8-2012 to approve aloan agreement with SunTrust Bank providing for a $1,820,000 loan to refinance the series2010 revenue note at a reduced interest rate.

=SunTrust Loan AgreementTerm: September 1, 2012 through March 1, 2026Amount borrowed: $1,820,000Principal payments: $11,304 monthlyInterest rate: 2.93%Amount outstanding

at September 30, 2016 $ 1,288,696

56



SEPTEMBER 30, 2016



Debt service requirements to maturity are as follows:

Principal Interest

2017 $ 135,652 $ 36,431

2018 135,652 32,402

2019 135,652 28,372

2020 135,652 24,409

2021-2025 678,262 61,285

2026 67,826 587

$ 1,288,696 $ 183,486

12. Reserved Net Position

Pension Trust Fund - The net position in the Pension Trust Fund is reserved to indicate

fund equity is restricted for future benefits to members of the pension plan is summarized as

follows:

Policemen’s Pension Fund $ 2,823,955

Net position restricted for pensions $ 2,823,955

57



SEPTEMBER 30, 2016

13. Details of Constraints on Fund Balances of Governmental Funds

General

Fund

Capital

Project

Fund

Road

and Bridge

Fund Total

Fund balances:

Nonspendable:

Prepaids $ 8,417 $ - $ - $ 8,417

Restricted for:

Police education 2,302 - - 2,302

Police equipment 5,783 - - 5,783

Capital projects - 399,952 41,526 441,478

Committed to:

Insurance deductible 14,500 - - 14,500

Beautification 18,806 - - 18,806

Public works equipment 52,841 - - 52,841

Beach cleanup 22,000 - - 22,000

Unassigned: 2,225,605 - - 2,225,605

Total fund balances $ 2,350,254 $ 399,952 $ 41,526 $ 2,791,732

14. Budgetary - GAAP Reporting Reconciliation

The accompanying financial statements present comparisons of the legally adopted

budget with actual data on a GAAP (generally accepted accounting principles) basis.

Accounting principles applied by the Town for purposes of developing data on a budgetary

basis did not differ significantly from those used to present financial statements in conformity

with generally accepted accounting principles for the year ended September 30, 2016.

58



SEPTEMBER 30, 2016

15. Contingent Liabilities

Amounts received or receivable from grantor agencies are subject to audit and

adjustment by grantor agencies, principally the State of Florida. Any disallowed claims,

including amounts already collected, may constitute a liability of the applicable funds. The

amount, if any, of expenditures which may be disallowed by the grantor cannot be determined

at this time although the Town expects such amounts, if any, to be immaterial.

The Town did not receive federal grant funds during the fiscal year ended

September 30, 2016, and is not, therefore, subject to the program compliance audit by the

grantee under the Office of Management and Budget Circular A-133, “Audits of States, Local

Governments and Non-Profit Organizations”.

The Town has not entered into any operating leases with scheduled rent increases as

of September 30, 2016.

16. Postemployment Benefits

The Town does not provide postemployment benefits for police officers or general

employees other than pension benefits. Postemployment health care benefits are made

available to the Town’s terminated employees in accordance with the Consolidated Omnibus

Budget Reconciliation Act of 1985 (COBRA). Under COBRA, the Town is required to offer

an election to deceased or terminated participants, their spouses or dependents, to continue

coverage in the health plan provided by the Town. The cost of coverage which the Town may

charge the participant may not exceed 102% of the applicable premium.

59



SEPTEMBER 30, 2016

17. Defined Benefit Plan

Plan Description:

The following brief description of the Town of Indian Shores Policemen’s Retirement

Plan (Plan) is provided for general information purposes only. Participants should refer to the

Plan Ordinance for more complete information.

The Plan is a single employer defined benefit pension plan covering all full-time

sworn police officers (hired after January 1, 1996) of the Town of Indian Shores, Florida

(Town). Participation in the Plan is required as a condition of employment. Originally

established by Town Ordinance in 1996 and amended in 2001 the Plan provides for pension,

death and disability benefits. The Plan is subject to provisions of Chapter 185 of the State of

Florida Statutes.

The Plan in accordance with the above statute, is governed by a five member pension

board. Two police officers who are elected by a majority of the members of the Plan, two

are residents of the Town who are appointed by the Town Council and a fifth member elected

by the other four members constitute the pension board. The Town and the Plan participants

are obligated to fund all Plan costs based upon actuarial valuations. The Town is authorized

to establish benefit levels and the Board of Trustees approve the actuarial assumptions used

in the determination of contribution levels.

60



SEPTEMBER 30, 2016

17. Defined Benefit Plan (Continued)

Current membership in the Plan is comprised of all full-time sworn police officers of

the Town of Indian Shores and is summarized as follows:

September 30,

Group 2016

Retirees and beneficiaries currently

receiving benefits 3

Terminated plan members entitled to

but not yet receiving benefits -

Active plan members:

Fully vested 6

Nonvested 5

Total 11

Officers who retire at the earlier of 52 and 25 years of service or age 55 and the

completion of ten years of credited service are entitled to an annual retirement benefit, payable

monthly for life, in an amount equal to 2.50 percent of their average final compensation times

their years of credited service. Cost of living adjustments are not provided. The Plan permits

early retirement at age 50 and the completion of ten years of credited service. Benefits vest

upon completing ten years of credited service.

The Plan also provides death and disability benefits. The death benefit is the greater

of the officer's accumulated contributions or his accrued benefit. Disability payments will be

equal to 2.50 percent of the officer's average annual compensation times his years of credited

service but shall not be less than 42 percent of his average monthly compensation as of his

early retirement date.

61



SEPTEMBER 30, 2016


The Plan has not issued a stand-alone financial report for the year ended

September 30, 2016.

Basis of Accounting:

Basis of accounting is the method by which revenues and expenses are recognized in

the accounts and are reported in the financial statements. The accrual basis of accounting is

used for the Plan. Under the accrual basis of accounting, revenues are recognized when they

are earned and collection is reasonablyassured, and expenses are recognized when the liability

is incurred. Plan member contributions are recognized in the period in which the

contributions are due. Town contributions to the plan, as calculated by the Plan’s Actuary,

are recognized as revenue when due and the Town has made a formal commitment to provide

the contributions. Benefits and refunds are recognized when due and payable in accordance

with the terms of the plan.

New Accounting Pronouncements - The GASB has issued the following statement

which became effective for fiscal year 2016.

Statement No. 68, “Accounting and Financial Reporting for Pensions” - This

statement changes the focus of pension accounting for employers from whether they are

responsibly funding their plan over time to a point-in-tim liability that is reflected in the

employer’s financial statements for any actuarially unfunded portion of pension benefits

earned to date.

Government Accounting Standards Board (GASB) Statement No. 72, “Fair Value

Measurement and Application” requires disclosures to be made about fair value

measurements, the level of fair value hierarchy, and valuation techniques. Governments

should organize these disclosures by type of asset or liability reported in certain entities that

calculate net asset value per share (or its equivalent).

62



SEPTEMBER 30, 2016


Asset Allocation - The Plan’s adopted asset allocation policyas of September 30, 2016

is as follows:

Asset Class Target Allocation

Domestic equity 55%

International equity 10

Broad market fixed income 35

Total 100%

Rate of Return - For the year ended September 30, 2016, the annual money-weighted

rate of return on Pension Plan investments, net of pension plan investment expense, was

14.16 percent adjusted for the changing amounts actually invested.

The money-weighted rate of return expresses investment performance, net of

investment expense, adjusted for the changing amounts actually invested.

Funding Policy:

Officer contribution rates are established at 5.0 percent of salary. Accumulated officer

contributions are refunded if an officer leaves covered employment before ten years of

credited service. Interest is not paid on contributions of terminated officers with less than ten

years of credited service. State excise taxes collected from the Town’s residents by the State

of Florida are restricted to fund the Plan under Florida Statutes, Chapter 185. Contributions

are received from the Town in amounts sufficient to fund the Plan at an actuarially determined

rate specified by Florida Statute, Chapter 185. The Plan’s administrative costs are financed

through investment earnings. The Plan has no undue investment concentrations.

63



SEPTEMBER 30, 2016


The annual required contribution for the current year was determined as part of the

September 30, 2016 (most recent) actuarial valuation using the frozen entry age actuarial cost

method. The actuarial assumptions included (a) 7.0% reinvestment rate of return (net of

administrative expenses) and (b) projected salary increases based on credited service. Both

(a) and (b) included an inflation component of 3.0%. The assumptions did not include post-

retirement benefit increases. The actuarial value of assets was determined using techniques

that smooth the effects of short-term volatility in the market value of investments over a four

year period. The unfunded actuarial accrued liability is being amortized as a level percentage

of projected payroll on a closed basis. The remaining amortization period at October 1, 2014

was 27 years.

18. Net Pension Liability of the Town

The Town’s pension liability on September 30, 2016 was as follows:

Total pension liability $ 3,062,531

Plan fiduciary net position (2,823,955)

Town’s net pension liability $ 238,576

Total pension liability 92.2%

64



SEPTEMBER 30, 2016

18. Net Pension Liability of the Town (Continued)

Actuarial Assumptions:

Inflation 3.0%

Salary increases 5.50% - 10.0%

Investment rate of return 7.0%

Mortality rate: RP-2000 Table - Sex Distinct.

The long-term expected rate of return on pension plan investments was determined using a

building-block method in which best-estimate ranges of expected future real rates of return

(expected returns, net of pension plan investment expenses and inflation) are developed for

each major asset class. These ranges are combined to produce the long-term expected rate of

return by weighting the expected future real rates of return by the target asset allocation

percentage and by adding expected inflation. Best estimates of arithmetic real rates of return

for each major asset class included in the pension plan’s target asset allocation as of

September 30, 2016 are summarized in the following table:

Target Long-Term Expected Real Rate

Allocation Asset Class of Return

55% Domestic equity 5.6%

10% International equity 7.5%

35% Broad market fixed income 2.5%

100%

65



SEPTEMBER 30, 2016

18. Net Pension Liability of the Town (Continued)

Discount rate:

The discount rate used to measure the total pension liability was 7.00 percent. The

projection of cash flows used to determine the discount rate assumed that plan member

contributions will be made at the current contribution rate and that sponsor contributions

will be made at rates equal to the difference between actuarially determined contribution

rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net

position was projected to be available to make all projected future benefit payments of

current plan members. Therefore, the long-term expected rate of return on pension plan

investments was applied to all periods of projected benefit payments to determine the total

pension liability.

Current Discount1% Decrease Rate 1% Increase

6.00% 7.00% 8.00%

Town’s net

pension liability $ 594,683 $ 238,576 $ (116,379)

66



SEPTEMBER 30, 2016

19. Pension Expense and Deferred Outflows of Resources and Deferred

Inflows of Resources Related to Pensions

For the year ended September 30, 2016, the Town will recognize a pension expense of

$160,819.

On September 30, 2016, the Town reported deferred outflows of resources and deferred

inflows of resources related to pensions from the following sources:

Deferred Deferred

Outflows of Inflows of

Resources Resources

Differences between expected and actual $ 3,840 $ -

Changes of assumptions 97,086 -

Net difference between projected and actual

earnings on pension plan investments 69,984 -

Total $ 170,910 $ -

Amounts reported as deferred out flows of resources related to pensions will be recognized

in pension expense as follows:

Year ended September 30:

2016 $ 52,013

2017 52,017

2018 52,017

2019 52,017

2020 (18,271)

Thereafter (18,883)

67



SEPTEMBER 30, 2016

20. Schedule of Investment and Administrative Expenses - Chapter 185

Pension Plan

The schedule of investment and administrative expenses , investment income and

investment cost and fair value of the Policemen’s Pension Trust Fund for the fiscal year ended

September 30, 2016 is as follows:

Investment

Expenses

Administrative

Expenses

Legal fees $ - $ 11,659

Actuary fees - 750

Insurance - 2,677

Performance monitor - -

Custodial fees 1,208 -

Investment management -

fees 16,841 -

Total $ 18,049 $ 15,086

Appreciation (Depreciation) in Fair Value

of Investments

Realized Unrealized

Appreciation Appreciation

Investment Type (Depreciation) (Depreciation) Total

Government obligations $ (1,041) $ 681 $ (360)

Corporate obligations (2,350) 9,304 6,954

Municipal bonds (232) 2,307 2,075

Domestic stock 3,078 279,649 282,727

Foreign stock 2,396 25,709 28,105

` Total $ 1,851 $ 317,650$ 319,501

68



SEPTEMBER 30, 2016

21. Investments

The Plan’s investments at both fair value and adjusted cost as of September 30, 2016 are

summarized as follows:

Fair

Investment Cost Value

Government obligations $ 26,460 $ 26,853

Corporate obligations 411,434 416,400

Domestic stock 1,412,663 1,798,284

Foreign stock 117,954 155,665

Municipal bonds 99,445 108,273

Temporary investments 278,085 278,085

Total $2,346,041 $ 2,783,560

69



SEPTEMBER 30, 2016

22. Employees’ Pension Fund

The Town provides pension benefits for all of its full-time employees through a Money

Purchase Pension 401 Plan (Plan) adopted on October 1, 1986. In a money purchase pension

plan benefits depend solely on amounts contributed to the plan plus investment earnings.

Employees are eligible to participate on employment. The Plan requires that the Town contribute

thirteen percent of their compensation. All participating employees must contribute a minimum

of seven percent of their compensation. All full-time employees hired prior to October 1, 1986

are fully vested. The Town's contributions for each employee (and interest allocated to the

employee's amount) hired after October 1, 1986, are fully vested after five years of continuous

service. Town contributions for, and interest forfeited by, employees who leave employment

before five years of service are used to reduce the Town's current-period contribution requirement.

The Plan allows participant loans for certain specified purposes. Loans may not exceed the

lesser of fifty percent of the participant’s vested account balances or $50,000. Loans must be

repaid within five years at a rate of prime plus 0.5% or the FHA/VA rate on loans for a principal

residence.

The Town's total payroll in fiscal year 2016 was $1,186,761. The Town's contributions

were calculated using the participants’ salary amount of $459,277.. The Town made the required

13% contribution offset by any forfeitures during the year ended September 30, 2016. The

employees who participate in this Plan must make a minimum contribution of 7% of their total

salaries. Both the Town and the covered employees made the required contributions summarized

as follows:

Percentageof Current

Contribution CoveredAmount Payroll

Required:Town $ 59,706 13%

Employees 32,149 7%

Total contributions $ 91,855

70



SEPTEMBER 30, 2016

23. Deferred Compensation Plan

The Town maintains a deferred compensation plan (Plan) under the provisions of

Section 457 of the Internal Revenue Code, as amended. This law stipulates that all assets and

income of the plan must be held in trust for the exclusive benefit of the Plan participants and their

beneficiaries. The Town’s plan is administered by the International City Management

Association Retirement Corporation (ICMA) and provides the plan participants with the option

to invest in eleven different registered investment funds (mutual funds). Although the Town is

the Trustee of the plan, the Town has no administrative involvement and performs no investing

function for the plan and has not therefore, reported the plan in this financial report.

24. Post-Employment Health Care Benefits

GASB Statement No. 45: Accounting and Financial Reporting by Employers for

Postemployment Benefits Other than Pensions (OPEB), established new accounting standards

for postretirement benefits. The new standard does not require funding of OPEB expense, but

any difference between the annual required contribution (ARC) and the amount funded during

the year is required to be recorded in the employer’s financial statement as an increase (or

decrease) in the net OPEB obligation. The effective date for implementation of GASB 45 by

the Town of Indian Shores was October 1, 2009. The Town did obtain an actuarial valuation

in accordance with GASB 45 standards as of October 1, 2015, and discloses the following:

Plan Description and Funding Policy

Employees who retire from the Town of Indian Shores (Town), and eligible dependents and

survivors, are eligible to continue to participate in the Town’s health insurance programs at the

“blended” employee group rate which is determined annually by the Town and approved by

the Town Council. Retirees have 31 days to elect to enroll in the Town’s health insurance plan

in which they were participating at the time of retirement unless otherwise stated in a plan

document or collective bargaining agreement. As of September 30, 2016, there were no

eligible retirees participating in the Town’s health program.

71



SEPTEMBER 30, 2016

24. Post Employment Health Care Benefits (Continued)

The Town provides no funding for any portion of the premiums after retirement. However, the

Town recognizes that there is an “implicit subsidy” arising as a result of the blended rate

premium since retiree health care costs, on average, are higher than active employee healthcare

costs. The plan is not accounted for as a trust fund as an irrevocable trust has not been

established to fund the plan. The plan does not issue a separate financial report.

Annual OPEB Cost and Net OPEB Obligation

The City’s annual other post-employment (OPEB) cost is calculated based on the annual

required contribution (ARC) of the employer, an amount actuarially determined in

accordance with parameters of GASB Statement 45. The ARC represents a level of funding

that, if paid on an ongoing basis, is projected to cover normal costs each year and to amortize

any unfunded actuarial liabilities over a period not to exceed 30 years. The Town’s annual

OPEB cost for its plan is as follows:

OPEB Cost

9/30/16 9/30/14

Annual required contribution (ARC) $ 10,884 $ 15,564

Interest on net OPEB obligation 1,456 1,284

Adjustment to ARC (2,285) (1,663)

Annual OPEB cost 10,055 15,185

Contribution made (pay-as-you-go basis) (5,954) (9,519)

Increase in net OPEB obligation 4,101 5,666

Net OPEB obligation, beginning of year 36,410 25,682

Net OPEB obligation, end of year $ 40,511 $ 31,348

72



SEPTEMBER 30, 2016


Year

Ended

September 30,

Annual

OPEB

Cost

Percentage

Contributed

Net

OPEB

Obligation

2016 $ 10,055 59.2% $ 40,511

2015 15,525 67.4% 36,410

2014 15,185 62.7% 31,348

Actuarial valuations involve estimates of the value of reported amounts and assumptions

about the probability of events in the future. Amounts determined regarding the status of the

plan and the annual required contributions of the Town are subject to continual revision as

actual results are compared to past expectations and new estimates are made about the future.

The schedule of funding progress, presented as required supplementary information in the

notes to the financial statements, presents multiyear trend information that shows whether

the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial

accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits are based on the substantive plan and include the type of benefits in

force at the valuation date and the pattern of sharing benefits between the Town and the plan

members at that point. Actuarial calculations reflect a long term perspective and employ

methods and assumptions that are designed to reduce the short term volatility in actuarial

accrued liabilities and the actuarial value of assets. Significant methods and assumptions

used for this valuation are as follows:

73



SEPTEMBER 30, 2016


Actuarial Assumptions

Valuation Measurement Date October 1, 2015

Fiscal Year End September 30, 2016

Actuarial Value of Assets Market Value

Mortality Rate RP-2000 Combined Healthy Mortality Table with no

projection

Interest Rate 4.00% per year compounded annually, net of

investment related expenses

Retirement Rate 100% at age 55

Termination Rates Selected rates for various ages listed below:

% Remaining Employed

Age Until Assumed Retirement Age

20 29.60%

30 59.30%

40 84.10%

50 100.00%

Participation Rate 20% of active employees are assumed to maintain

benefit coverage after retirement

Spousal Coverage 50% of active employees who have elected benefit

coverages are assumed to cover their spouses

Administrative Expenses $3,000

Credited Service Total completed years of employment with the Town

Eligibility for Insurance Coverage Must meet the eligibility requirements for Normal or

Early Retirement

Health and Dental Contributions

Employee 100% of the active premium rate

Town Remaining amount necessary for payment of claims

74

REQUIRED

SUPPLEMENTARY INFORMATION

OTHER THAN MD&A

OTHER POST-EMPLOYMENT

BENEFITS


REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A

OTHER POST-EMPLOYEMENT VENEFITS

SEPTEMBER 30, 2016

Schedule of Employer Contributions:

Year

ended

Annual

Required

Contribution

Estimated

Contributions

Percentage

Contributed

September 30, 2016 $ 10,055 $ - 0.0%

September 30, 2015 15,525 - 0.0%

September 30, 2014 15,185 - 0.0%

Schedule of Funding Progress:

Actuarial

Actuarial Accrued UAAL as a

Value Liability Unfunded Percentage of

Actuarial of (AAL) AAL Funded Covered Covered

Valuation Assets EAN (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)

October 1, 2015 $ - $ 55,063 $ 55,063 0.00% $ 1,035,954 5.32%

October 1, 2014 N/A N/A N/A N/A N/A N/A

October 1, 2013 N/A N/A N/A N/A N/A N/A

October 1, 2012 - 98,388 98,388 0.00% 1,082,685 9.09%

75

REQUIRED SUPPLEMENTARY

INFORMATION FOR

SINGLE EMPLOYER POLICE OFFICERS’

DEFINED BENEFIT PENSION PLAN

UNDER GASB 68



SCHEDULE OF CHANGES IN NET PENSION LIABILITY

Last Three Fiscal Years

9/30/2016 9/30/2015 9/30/2014

Total pension liability:

Service cost $ 102,476 $ 95,105 $ 84,581

Interest 195,271 180,970 167,384

Changes in excess state money - - -

Changes in funding standard account - - -

Share plan allocation - - -

Changes of benefit terms - - -

Differences between expected and actual 5,375 -

Changes of assumptions 113,266 - -

Contributions - buy back - - -

Benefit payments, including refunds

of employee contributions (85,922) (68,394) (68,394)

Net change in total pension liability 325,091 213,056 183,571

Total pension liability - beginning 2,737,440 2,524,384 2,340,813

Total pension liability - ending (a) $ 3,062,531 $ 2,737,440 $ 2,524,384

76


Required Supplementary Information (Continued)

SCHEDULE OF CHANGES IN NET PENSION LIABILITY (CONTINUED)


9/30/16 9/30/15 9/30/14

Plan fiduciary net position:

Contributions - employer $ 78,774 $ 140,058 129,715

Contributions - State 20,206 16,206 13,996

Contributions - employees 31,776 31,632 29,009

Contributions - buy back - - -

Net investment income 348,353 (172,176) 257,445

Benefit payments, including refunds

of employee contributions (85,922) (68,394) (68,394)

Administrative expenses (15,086) (5,212) (8,366)

Other - - -

Net change in plan fiduciary net position 378,101 (57,886) 353,405

Plan fiduciary net position - beginning 2,445,854 2,503,740 2,150,335

Plan fiduciary net position - ending (b) $ 2,823,955 $ 2,445,854 2,503,740

Net pension liability (a) - (b) $ 238,576 $ 291,586 $ 20,644

77



SCHEDULE OF RELATED RATIOS


9/30/2016 9/30/2015 9/30/2014

Plan fiduciary net position as a percentage of

the total pension liability 92.21% 89.35% 99.18%

Covered employee payroll $ 635,520 $ 632,640 $ 580,180

Net pension liability as a percentage of

covered payroll 37.54% 46.09% 3.56%

SCHEDULE OF CONTRIBUTIONS


9/30/2016 9/30/2015 9/30/2014

Actuarially determined contribution $ 80,521 $ 88,143 $ 143,304

Contributions in relation to the

actuarially determined contributions 98,980 156,264 143,711

Contributions deficiency (Excess) $ (18,459) $ (68,121) $ (407)

Covered employee payroll $ 635,520 $ 632,640 $ 580,180

Contributions as a percentage of

covered employee payroll 15.57% 24.70% 24.77%

78



NOTES TO SCHEDULE OF CONTRIBUTIONS

Valuation date: 10/01/2014

Actuarially determined contribution rates are calculated as of October 1, three years prior to the

end of the fiscal year in which contributions are reported.

Methods and assumptions used to determine contribution rates:

Funding method: Frozen entry age actuarial cost method.

Amortization method: Level percentage of pay.

Remaining amortization period: 27 years (as of 10/1/14)

Inflation increases: 3.0% per year.

Salary increases: Years of Salary

Service Increase

0 10.0%

2-4 7.0%

5+ 5.5%

Projected salary at retirement is increased 12% to

account for non-regular compensation.

Payroll increases: None

Interest rate: 7.0% per year compounded annually, gross of investment

related expenses.

Retirement age: 5.0% per year eligible for Early Retirement. 10.0% per year

eligible for Normal Retirement (with 100% at Age 58 with

13 years of Service age 55 with 28 years of service). Also,

any member who has reached Normal Retirement age on

the valuation date is assumed to continue employment for

one additional year.

Disability Rate: % Becoming Disabled

Age During the Year

20 0.03%

30 0..04%

40 0.07%

50 0.18%

79



NOTES TO SCHEDULE OF CONTRIBUTIONS (CONTINUED)

Disability Rate: % Becoming Disabled

Age During the Year

20 0.03%

30 0..04%

40 0.07%

50 0.18%

Termination Rates: % Terminating

Service During the Year

0-2 Years 20.0%

3-4 Years 15.0%

5+ Years 5.0%

Mortality: RP-2000 mortality table, sex distinct.

80



SCHEDULE OF INVESTMENT RETURNS

Last Two Fiscal Years

9/30/2016 9/30/2015 9/30/2014

Annual money-weighted rate

of return net of investment expenses 14.16% -6.72% 11.71%

81

COMBINING AND INDIVIDUAL FUND

FINANCIAL STATEMENTS

Special Revenue Funds are used to account for specific revenues thatare legally restricted to expenditure for particular purposes.

To account for the receipt and expenditure of revenues received from theState and the County which are restricted for road use andsummarized as follows:

STATE - 8th Cent Motor Fuel Tax Receipts

COUNTY - Local Option Gas Tax Receipts

COUNTY - Transportation Impact Fee Receipts

NONMAJOR GOVERNMENTAL FUND

SPECIAL REVENUE FUND

Road and Bridge Fund

Special RevenueFund

Road andBridgeFund

Equity in pooled cash $ 37,574Receivables:

Intergovernmental - County 3,952

TOTAL ASSETS $ 41,526

LIABILITIES:

Accounts payable $ -

TOTAL LIABILITIES -

FUND BALANCES (DEFICITS):Restricted 41,526

TOTAL FUND BALANCES (DEFICITS) 41,526

TOTAL LIABILTIES AND FUNDBALANCES (DEFICITS) $ 41,526


BALANCE SHEET

SEPTEMBER 30, 2016


ASSETS

LIABILITIES AND FUND BALANCES (DEFICITS)

82

Special RevenueFund

Road andBridgeFund

REVENUES:Intergovernmental revenues $ 37,154Charges for services 45,100

TOTAL REVENUES 82,254

EXPENDITURES:Current:Physical environment:

Public works 120,222

TOTAL EXPENDITURES 120,222

EXCESS (DEFICIENCY) OF REVENUESOVER (UNDER) EXPENDITURES (37,968)

OTHER FINANCING SOURCES:Transfer in 43,130

EXCESS OF REVENUES AND OTHER FINANCINGSOURCES OVER EXPENDITURES 5,162

FUND BALANCE,OCTOBER 1 36,364

FUND BALANCE,SEPTEMBER 30 $ 41,526

83


STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCE



Variance

With

Final Budget-

Budgeted Amounts Favorable

Original Final Actual (Unfavorable)

REVENUES:

Intergovernmental revenues $ 31,200 $ 31,200 $ 37,154 $ 5,954

Charges for services 37,470 37,470 45,100 7,630

TOTAL REVENUES 68,670 68,670 82,254 13,584

EXPENDITURES:

Current:

Public Works 111,800 111,800 120,222 (8,422)

TOTAL EXPENDITURES 111,800 111,800 120,222 (8,422)

EXCESS OF REVENUES

OVER EXPENDITURES (43,130) (43,130) (37,968) 5,162

OTHER FINANCING SOURCES:

Transfer in 43,130 43,130 43,130 -

EXCESS OF REVENUES AND

OTHER FINANCING SOURCES

OVER EXPENDITURES - - 5,162 5,162

FUND BALANCE,

OCTOBER 1 36,364 36,364 36,364 -

FUND BALANCE,SEPTEMBER 30 $ 36,364 $ 36,364 $ 41,526 $ 5,162

84


SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES ANDCHANGES IN FUND BALANCE-BUDGET AND ACTUAL


Road and Bridge Fund

CAPITAL ASSETS

USED IN THE OPERATION

OF GOVERNMENTAL FUNDS

Governmental Funds Capital Assets:

Land $ 827,462

Buildings 5,345,398

Improvements other than buildings 9,186,704

Equipment 739,112

Total Governmental Funds Capital Assets $ 16,098,676

Governmental Funds Capital Assets by Source:

General Fund $ 2,317,893

Special Revenue Funds 4,276,874

Federal and state entitlements and grants 2,305,576

Long-term borrowing 7,198,333

Total Governmental Funds Capital Assets $ 16,098,676

(1) This schedule presents only the capital asset balances related to governmental funds.


CAPITAL ASSETS USED IN THE OPERATION

SEPTEMBER 30, 2016

OF GOVERNMENTAL FUNDSSCHEDULE BY SOURCE(1)

85

Improvements

Other Than

Total Land Buildings Buildings Equipment

General Government:

Control:

Administrative $ 4,202,060 $ - $ 3,036,389 $ 1,132,895 $ 32,776

Finance 50,384 - - 7,875 42,509

Legislative 522,400 483,299 - 28,878 10,223

Total control 4,774,844 483,299 3,036,389 1,169,648 85,508

Staff agencies:

Public services 9,147,456 344,163 678,960 7,975,451 148,882

Total staff agencies 9,147,456 344,163 678,960 7,975,451 148,882

Total General Government 13,922,300 827,462 3,715,349 9,145,099 234,390

Public Safety:

Police protection 2,120,768 - 1,630,049 7,179 483,540

Maintenance 25,190 - - 24,371 819

Protective inspections 19,250 - - - 19,250

Total public safety 2,165,208 - 1,630,049 31,550 503,609

Culture and Recreation:

Library 11,168 - - 10,055 1,113

Total culture and recreation 11,168 - - 10,055 1,113

Total governmental fund

Capital Assets $ 16,098,676 $ 827,462 $ 5,345,398 $ 9,186,704 $ 739,112

(1) This schedule represents only the capital asset balances related to governmental funds.

86


CAPITAL ASSETS USED IN THE OPERATION

SCHEDULE BY FUNCTION AND ACTIVITY(1)OF GOVERNMENTAL FUNDS

SEPTEMBER 30, 2016

Function and Activity

Governmental Governmental

Fund Fund

Capital Assets Capital Assets

October 1, September 30,

2015 Additions Deductions 2016

General Government:

Control:

Administrative $ 4,202,060 $ - $ - $ 4,202,060

Finance 50,384 - - 50,384

Legislative 522,400 - - 522,400

Total control 4,774,844 - - 4,774,844

Staff agencies:

Public services 9,190,567 9,190,568

Total staff agencies 9,190,568 - - 9,190,568

Total General Government 13,965,412 - - 13,965,412

Public Safety:

Police protection 2,120,780 - 43,124 2,077,656

Maintenance 25,190 - - 25,190

Protective inspections 19,250 - - 19,250

Total public safety 2,165,220 - 43,124 2,122,096

Culture and Recreation:

Library 11,168 - - 11,168

Total culture and recreation 11,168 - - 11,168

Total governmental funds

Capital Assets $ 16,141,800 $ - $ 43,124 $ 16,098,676

(1) This schedule represents only the capital asset balances related to governmental funds.


87

Function and Activity


CAPITAL ASSETS USED IN THE OPERATIONOF GOVERNMENTAL FUNDS

SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY(1)

This part of the Town of Indian Shores, Florida's comprehensive annual financialreport presents detailed information as a context for understanding what theinformation in the financial statements, note disclosures, and requiredsupplementary information says about the government's overall financial health.

Content Page

Financial Trends 88

These schedules contain trend information to help the reader

understand how the government's financial performance and

well-being have changed over time

Revenue Capacity 95

These schedules contain information to help the reader assess the

government's most significant local revenue source, the property

tax.

Debt Capacity 99

These schedules present information to help the reader assess the

affordability of the government's current levels of outstanding debt

and the government's ability to issue debt in the future.

Demographic and Economic Information 103

These schedules offer demographic and economic indicators to

help the reader understand the environment within which the

government's financial activities take place.

Operating Information 105

These schedules contain service and infrastructure data to help thereader understand how the information in the government'sfinancial report relates to the services the government providesand the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive

STATISTICAL SECTION

annual financial reports for the relevant year.

FINANCIAL TRENDS

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

EXPENSES

Governmental Activities:

General government $ 980,918 $ 942,067 $ 961,226 $ 932,985 $ 289,805 $ 786,036 $ 685,884 $ 716,258 $ 690,225 $ 675,068

Public safety 1,416,864 1,322,445 1,338,956 1,331,741 1,709,958 1,332,892 1,259,272 1,249,656 1,112,913 1,188,839

Physical environment 968,659 1,042,111 609,083 920,764 1,548,023 1,107,363 1,158,904 1,147,173 977,860 635,668

Culture and recreation 41,333 38,006 340,390 18,540 3,942 4,147 4,932 4,697 4,945 5,005

Total governmental

activities expenses 3,407,774 3,344,629 3,249,655 3,204,030 3,551,728 3,230,438 3,108,992 3,117,784 2,785,943 2,504,580

Business-type activities:

Parking fee - - - - - - 33,829 9,467 12,120 15,704

Total business-type

activities expenses - - - - - - 33,829 9,467 12,120 15,704

Total primary

government expenses $ 3,407,774 $ 3,344,629 $ 3,249,655 $ 3,204,030 $ 3,551,728 $ 3,230,438 $ 3,142,821 $ 3,127,251 $ 2,798,063 $ 2,520,284

PROGRAM REVENUES


Charges for services $ 1,057,138 $ 740,477 $ 701,726 $ 618,509 $ 555,740 $ 552,536 $ 510,934 $ 495,331 $ 472,573 $ 450,970

Capital grants

and contributions 1,077 2,182 5,541 7,407 1,000 98,755 64,300 - 57,525 151,450

Total governmental activities

program revenues 1,058,215 742,659 707,267 625,916 556,740 651,291 575,234 495,331 530,098 602,420


Charges for services:

Parking fee - - - - - - 51,164 21,552 21,970 33,771

Total business-type

activities revenues - - - - - - 51,164 21,552 21,970 33,771

Total primary government

program revenues $ 1,058,215 $ 742,659 $ 707,267 $ 625,916 $ 556,740 $ 651,291 $ 626,398 $ 516,883 $ 552,068 $ 636,191

NET (EXPENSE) REVENUE

Governmental activities $ (2,349,559) $ (2,601,970) $ (2,574,523) $ (2,994,988) $ (2,994,988) $ (2,533,758) $ (2,622,453) $ (2,255,845) $ (1,902,160) $ (1,234,940)

Business-type activities - - - - - 17,335 12,085 9,850 18,067 13,005


net expense $ (2,349,559) $ (2,601,970) $ (2,574,523) $ (2,994,988) $ (2,994,988) $ (2,516,423) $ (2,610,368) $ (2,245,995) $ (1,884,093) $ (1,221,935)


CHANGES IN NET POSITION

LAST TEN FISCAL YEARS

(accrual basis of accounting)

88

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

Governmental Activities:

Taxes:

Property taxes $ 1,341,389 $ 1,251,735 $ 1,171,055 $ 1,151,961 $ 1,122,813 $ 1,133,086 $ 1,269,429 $ 1,407,705 $ 1,609,971 $ 1,729,823

Franchise taxes 249,676 268,909 260,669 240,962 250,416 259,710 282,121 272,978 230,276 226,594

Sales taxes 263,720 271,696 223,871 225,466 202,003 218,139 216,163 220,660 226,422 263,933

Other taxes 535,239 938,574 923,403 901,248 886,145 533,205 546,787 518,241 479,609 438,340

State revenue sharing 31,827 31,260 30,188 30,074 36,634 28,090 30,365 30,222 34,284 37,393

Investment earnings 6,632 8,948 3,260 2,320 5,538 8,667 26,287 47,297 124,546 286,756

Miscellaneous 50,833 4,933 16,022 50,626 393,744 42,247 34,869 56,820 90,765 357,577

Gain (loss) on sale

of capital assets - - - - - - - - - 754

Transfers - - - - - - 7,547 12,085 12,320 18,937

Total governmental activities 2,479,316 2,776,055 2,628,468 2,602,657 2,897,293 2,223,144 2,413,568 2,566,008 2,808,193 3,360,107


Investment earnings - - - - - - - - - -

Transfers - - - - - - (7,547) (12,085) (12,320) (18,937)

Total business-type activities - - - - - - (7,547) (12,085) (12,320) (18,937)

Total primary government $ 2,479,316 $ 2,776,055 $ 2,628,468 $ 2,602,657 $ 2,897,293 $ 2,223,144 $ 2,406,021 $ 2,553,923 $ 2,795,873 $ 3,341,170

CHANGE IN NET POSITION

Governmental activities $ 129,757 $ 174,085 $ 86,080 $ 24,543 $ (97,695) $ (356,003) $ (120,190) $ (45,661) $ 552,348 $ 1,457,947

Business-type activities - - - - - - 9,788 - (2,470) (870)

Total primary government $ 129,757 $ 174,085 $ 86,080 $ 24,543 $ (97,695) $ (356,003) $ (110,402) $ (45,661) $ 549,878 $ 1,457,077


CHANGES IN NET POSITION (CONTINUED)



89

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007


Net investment in

capital assets: $ 4,803,080 $ 4,646,801 $ 4,861,765 $ 4,805,460 $ 5,162,660 $ 5,215,856 $ 2,857,899 $ 3,680,203 $ 4,061,393 $ 2,007,452

Restricted 8,085 8,085 8,085 8,085 302 2,096 # 62,412 47,660 495,467 2,540,553

Unrestricted 2,565,732 2,592,254 2,253,161 2,223,386 1,849,426 1,892,131 4,545,775 3,868,997 3,085,661 2,542,168

Total governmental activities

net assets $ 7,376,897 $ 7,247,140 $ 7,123,011 $ 7,036,931 $ 7,012,388 $ 7,110,083 $ 7,466,086 $ 7,596,860 $ 7,642,521 $ 7,090,173


Net investment in

capital assets: $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Unrestricted - - - - - - - (9,788) (9,788) (7,318)

Total business-type

activities net assets $ - $ - $ - $ - $ - $ - $ - $ (9,788) $ (9,788) $ (7,318)

Primary government:

Net investment in

capital assets: $ 4,803,080 $ 4,646,801 $ 4,861,765 $ 4,805,460 $ 5,162,660 $ 5,215,856 $ 2,857,899 $ 3,680,203 $ 4,061,393 $ 2,007,452

Restricted 8,085 8,085 8,085 8,085 302 2,096 62,412 47,660 495,467 2,540,553

Unrestricted 2,565,732 2,592,254 2,253,161 2,223,386 1,849,426 1,892,131 4,545,775 3,868,997 3,075,873 2,534,850


net position $ 7,376,897 $ 7,247,140 $ 7,123,011 $ 7,036,931 $ 7,012,388 $ 7,110,083 $ 7,466,086 7,596,860 $ 7,632,733 $ 7,082,855

90


NET POSITION BY COMPONENT



Fiscal Property Utility FranchiseYear Tax Tax Tax Total

2007 $ 1,729,823 $ 291,005 $ 226,594 $ 2,247,422

2008 1,609,971 310,121 230,276 2,150,368

2009 1,407,705 328,578 272,978 2,009,261

2010 1,269,429 362,487 282,121 1,914,037

2011 1,133,086 358,061 259,710 1,750,857

2012 1,122,813 337,506 250,416 1,710,735

2013 1,151,961 349,127 240,962 1,742,050

2014 1,171,055 370,330 260,669 1,802,054

2015 1,251,735 372,188 268,909 1,892,832

2016 1,341,389 374,928 249,676 1,965,993

91


TAX REVENUES BY SOURCEGOVERNMENTAL ACTIVITIES

(accrual basis of accounting)LAST TEN FISCAL YEARS

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

General Fund:

Nonspendable $ 8,417 $ 1,284 $ 50,441 $ 50,754 $ 39,368 $ 36,633 $ 42,895 $ 61,028 $ 87,645 $ 106,102

Restricted 8,085 8,085 8,085 8,085 302 2,096 - - - -

Committed 108,147 108,147 108,147 108,147 108,147 129,498 132,921 132,425 129,857 125,226

Unassigned 2,225,605 1,781,377 1,577,922 1,575,006 1,617,318 1,351,725 1,324,062 2,474,591 2,139,170 2,120,726

Total general fund $ 2,350,254 $ 1,898,893 $ 1,744,595 $ 1,741,992 $ 1,765,135 $ 1,519,952 $ 1,499,878 $ 2,668,044 $ 2,356,672 $ 2,352,054

All Other Governmental Funds:

Restricted, reported in:

Special revenue fund $ 41,526 $ 36,364 $ 35,183 $ 29,486 $ 28,299 $ 62,786 $ 59,649 $ 54,276 $ 101,976 $ 46,195

Capital projects fund 399,952 997,891 769,549 761,707 478,160 703,425 3,705,832 1,507,650 1,465,846 2,950,054

Total all other

governmental funds $ 441,478 $ 1,034,255 $ 804,732 $ 791,193 $ 506,459 $ 766,211 $ 3,765,481 $ 1,561,926 $ 1,567,822 $ 2,996,249

92


GOVERNMENTAL FUNDS


(modified accrual basis of accounting)

FUND BALANCES

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

REVENUES

Taxes $ 1,965,993 $ 1,892,832 $ 1,802,054 $ 1,742,050 $ 1,710,735 $ 1,750,857 $ 1,914,037 $ 2,009,261 $ 2,150,368 $ 2,247,422

Licenses, fees and permits 412,707 128,670 110,735 55,944 41,231 65,122 54,639 51,349 45,249 51,350

Intergovernmental 456,935 871,524 812,673 815,068 788,276 520,128 495,128 443,499 487,719 600,110

Charges for services 609,771 591,937 557,838 527,764 496,959 471,288 421,767 395,433 400,517 369,292

Fines and forfeits 34,660 19,870 33,153 34,801 17,550 16,126 21,118 48,549 26,807 30,329

Interest earnings 6,632 8,948 3,260 2,320 5,538 8,667 26,287 47,297 124,546 286,756

Miscellaneous 30,785 6,183 16,022 50,626 393,744 42,247 43,597 49,200 90,763 37,931

Total revenues 3,517,483 3,519,964 3,335,735 3,228,573 3,454,033 2,874,435 2,976,573 3,044,588 3,325,969 3,623,190

EXPENDITURES

General government 906,179 844,917 845,561 806,518 749,678 699,540 664,794 696,311 681,746 660,743

Public safety 1,330,339 1,350,835 1,347,323 1,327,061 1,326,450 1,336,342 1,330,917 1,220,155 1,201,711 1,197,106

Physical environment 1,438,124 943,663 809,151 792,131 1,412,767 3,815,797 1,954,183 824,159 2,875,311 1,406,594

Culture and recreation 4,305 3,978 317,558 41,340 3,849 4,054 4,837 4,602 4,850 4,910

Total expenditures 3,678,947 3,143,393 3,319,593 2,967,050 3,492,744 5,855,733 3,954,731 2,745,227 4,763,618 3,269,353

Excess of revenues

over (under) expenses (161,464) 376,571 16,142 261,523 (38,711) (2,981,298) (978,158) 299,361 (1,437,649) 353,837

OTHER FINANCING

SOURCES (USES)

Sale of equipment - 7,250 - 68 4,142 2,102 - - 1,550 754

Proceeds from insurance 20,048 - - - - - - - - -

Transfers in 421,256 416,337 425,504 401,432 404,907 416,673 7,547 416,814 929,794 967,912

Transfers out (421,256) (416,337) (425,504) (401,432) (404,907) (416,673) - (404,729) (917,474) (948,975)

Repayment of debt - - - - (1,800,000) - - - - -

Proceeds from debt - - - - 1,820,000 - 2,000,000 - - -

Total other financing

sources (uses) 20,048 7,250 - 68 24,142 2,102 2,007,547 12,085 13,870 19,691

Net change in fund balances $ (141,416) $ 383,821 $ 16,142 $ 261,591 $ (14,569) $ (2,979,196) $ 1,029,389 $ 311,446 $ (1,423,779) $ 373,528


GOVERNMENTAL FUNDS


(modified accrual basis of accounting)

CHANGES IN FUND BALANCES OF

93

Fiscal General Public Physical Culture andYear Government Safety Environment Transportation Recreation Total

2007 $ 660,743 $ 1,197,106 $ 1,379,393 $ 27,201 $ 4,910 $ 3,269,353

2008 681,746 1,201,711 824,159 77,486 4,850 2,789,952

2009 696,311 1,220,155 668,448 155,711 4,602 2,745,227

2010 664,794 1,330,917 1,758,981 195,202 4,837 3,954,731

2011 699,540 1,336,342 3,704,335 111,462 4,054 5,855,733

2012 749,678 1,326,560 1,269,980 142,787 3,849 3,492,744

2013 806,518 1,327,061 679,593 112,538 41,340 2,967,050

2014 845,561 1,347,323 695,479 113,672 317,558 3,319,593

2015 844,917 1,350,835 825,033 118,630 3,978 3,143,393

2016 906,179 1,330,339 1,317,902 120,222 4,305 3,678,947

(1)Includes general and special revenue funds.


GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION(1)


94

REVENUE CAPACITY

Fiscal Total Total

Year Less: Taxable Direct

Ended Residential Commercial Other Tax-Exempt Assessed Tax Rate

September 30 Property Property Property Property Value (Millage)

2007 $ 1,157,130,200 $ 77,160,430 $ 11,899,000 $ 175,370,045 $ 1,070,819,585 1.6700

2008 1,102,315,305 57,374,400 26,277,900 145,788,511 1,040,179,094 1.6000

2009 844,183,588 56,240,569 20,855,872 15,333,040 905,946,989 1.6000

2010 701,565,935 41,395,339 1,201,187 12,302,326 744,162,461 1.7500

2011 653,805,048 44,028,361 1,069,846 10,349,760 664,827,856 1.7500

2012 611,537,753 41,708,642 1,054,662 9,723,206 621,221,419 1.8500

2013 614,682,714 33,880,610 1,071,883 10,873,421 617,540,369 1.8700

2014 685,893,091 33,033,711 1,083,452 11,514,648 687,444,356 1.8700

2014 685,893,091 33,033,711 1,083,452 11,514,648 687,444,356 1.8700

2015 734,909,414 34,406,073 1,155,229 11,739,867 737,177,938 1.8700

2016 799,201,617 36,874,297 1,238,698 13,290,289 824,024,323 1.8700

95


ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Town of Indian Shores

Operating 1.6700 1.6000 1.6000 1.7500 1.7500 1.8500 1.8700 1.8700 1.8700 1.8700

Total Town millage 1.6700 1.6000 1.6000 1.7500 1.7500 1.8500 1.8700 1.8700 1.8700 1.8700

Pinellas County School Board

Operating 8.2100 7.7310 8.0440 8.3568 8.3400 8.3850 8.0600 7.8410 7.7700 7.3180

Pinellas County

Operating 5.4700 4.8730 4.8108 4.8108 4.8730 4.8730 5.2755 5.2755 5.2755 5.2755

EMS 0.6300 0.5832 0.5832 0.5832 0.5832 0.8506 0.9158 0.9158 0.9158 0.9158

Debt service - - - - - - - - - -

Total County millage 6.1000 5.4562 5.3940 5.3940 5.4562 5.7236 6.1913 6.1913 6.1913 6.1913

County-wide millage set by other

taxing authorities:

-Pinellas Suncoast

Transit Authority 0.6074 0.5601 0.5601 0.5601 0.5601 0.7305 0.7305 0.7305 0.7305 0.7500

-Pinellas County

Planning Council 0.0195 0.0170 0.0107 0.0125 0.0125 0.0125 0.0160 0.0160 0.0160 0.0150

-Juvenile Welfare Board 0.7963 0.7384 0.7915 0.7915 0.7915 0.8337 0.8981 0.8981 0.8981 0.8981

-South West Florida Water

Management District 0.4220 0.3866 0.3866 0.3866 0.3770 0.3928 0.3818 0.3658 0.3488 0.3317

-Pinellas County Anclote

River Basin 0.4000 0.3701 0.3600 0.3200 0.2600 N/A N/A N/A N/A N/A

Total County-wide millage 2.2452 2.0722 2.1089 2.0707 2.0011 1.9695 2.0264 2.0104 1.9934 1.9948

TOTAL 18.2252 16.8594 17.1469 17.5715 17.5473 17.9281 17.2941 17.9127 17.8247 17.3741

Source: Pinellas County Property Appraiser


PROPERTY TAX RATES - DIRECT AND ALL OVERLAPPING GOVERNMENTS (PER $1,000)


96

Taxable Percentage of Taxable Percentage of Taxable Percentage of

Assessed Total Assessed Assessed Total Assessed Assessed Total Assessed

Value Rank Valuation Value Rank Valuation Value Rank Valuation

Balthasar, Susan M $ 4,808,881 1 0.59% $ 4,775,102 1 0.64% $ 4,736,804 1 0.73%

Smith, Hugh N. 2,873,730 2 0.36% 2,853,406 2 0.38% 2,830,363 2 0.44%

Aloha Bay Condo Assn., Inc. 2,601,480 3 0.32% 2,477,600 3 0.33% 2,477,600 3 0.38%

Ashton Tampa Residential LLC 2,490,241 4 0.31% 2,355,867 4 0.32% 2,163,548 4 0.34%

Indian Pass Cattlemen"s Assn Inc 2,475,000 5 0.03% 2,285,000 5 0.31%

Sole Lido Development LLC 2,366,672 6 0.29% 2,151,520 6 0.29% 2,151,520 5 0.33%

Savino, Michael K 2,322,037 7 0.29% 2,115,000 7 0.28%

Atassi, Hayan S 2,271,126 8 0.28% 2,064,660 8 0.28% 2,097,363 6 0.33%

Fernandez, Danilo & Carmelina 2,269,000 9 0.28% 2,055,624 9 0.28%

Cavanaugh, Lucille J 2,261,186 10 0.28% 2,055,624 10 0.28%

26,739,353$ 3.03% 25,189,403$ 3.39% 16,457,198$ 3.84%

Source: Pinellas County Property Appraiser

20152016


PRINCIPAL PROPERTY TAX PAYERS

September 30, 2016

2014

97

CollectionsTotal Taxable in

Fiscal Assessed Assessed Percentage Subsequent PercentageYear Valuation Valuation Levy Amount of Levy Years Amount of levy

2007 $ 1,246,189,630 $ 1,070,819,585 $ 1,800,767 $ 1,729,823 96 - $ 1,729,823 96

2008 1,191,725,805 1,040,179,094 1,664,287 1,609,971 97 - 1,609,971 97

2009 1,029,262,890 905,946,989 1,449,515 1,407,705 97 - 1,407,705 97

2010 844,799,088 749,562,914 1,311,735 1,269,429 97 1,269,429 97

2011 747,095,662 670,029,812 1,172,553 1,133,086 97 1,133,086 97

2012 670,470,390 626,503,903 1,159,032 1,122,337 97 476 1,122,813 97

2013 644,963,529 618,622,003 1,151,961 1,122,118 97 29,843 1,151,961 97

2014 693,108,122 644,963,529 1,206,082 1,169,899 97 1,206,082 97

2015 788,125,742 742,290,890 1,388,084 1,251,735 99 1,251,735 99

2016 855,421,517 808,833,024 1,512,518 1,463,462 99 1,463,462 99

(1) Florida Statutes provide for a discount of up to four percent for early retirement of ad valorem taxes.All unpaid taxes become delinquent on April 1, and are sold at auction on June 1 of each year as tax certificates.The Town, after all tax certificates are sold, has fully collected all ad valorem tax revenues.

Source: Pinellas County Property Appraiser.


PROPERTY LEVIES AND COLLECTIONS

Collections to DateFiscal Year of LevyCollections within the

98


DEBT CAPACITY

Less: AmountsFiscal Revenue for PerYear Debt Debt Service Total Capita

2007 $ 5,725,000 $ 287,397 $ 5,437,603 $ 3,014

2008 5,615,000 302,284 5,312,716 2,942

2009 5,500,000 277,318 5,222,682 2,923

2010 7,385,000 267,529 7,117,471 5,012

2011 7,198,333 252,284 6,946,049 4,892

2012 6,960,000 215,935 6,744,065 4,749

2013 6,705,652 247,065 6,458,587 4,548

2014 6,435,000 275,652 6,159,348 4,274

2015 6,159,348 280,652 5,878,696 4,128

2016 5,878,696 861,959 5,016,737 3,347

Note: Details regarding the Town's outstanding debt can be found in the notes to thefinancial statements.


99


RATIOS OF REVENUE DEBT OUTSTANDING

Net General Net General Percentage AmountObligation Nonself- Applicable to Applicable to

Bonded Debt Supporting Town of Town ofOutstanding Revenue Debt Total Indian Shores Indian Shores

Direct Debt:

Town of Indian Shores $ - $ 5,878,696 $ 5,878,696 100% $ 5,878,696

Overlapping Debt:Pinellas County School Board

(1)17,953,097 - 17,953,097 1.22% 394,968

Pinellas County, Florida (2) 11,230,104 - 11,230,104 1.34% 150,483Total overlapping debt 29,183,201 29,183,201 545,451

Total overall debt 29,183,201 5,878,696 35,061,897 $ 6,424,147

RATIO:

Overall debt per capita,1499 residents $ 4,285

(1) The Town's share is calculated based on the ratio of the 2016 School Board Taxable Value of$69,723,230,712 to the Town's Taxable Value of $849,605,990.

(2) The Town's share is calculated based on the ratio of the 2016 County Taxable Value of$63,599,221, 882 to the Town's Taxable Value of $849,605,990.

GOVERNMENTAL ACTIVITIES DEBT

100


DIRECT AND OVERLAPPING

SEPTEMBER 30, 2016(in thousands)

101

and the Charter of the Town of Indian Shores, Florida

has no legal debt margin


COMPUTATION OF LEGAL DEBT MARGIN

September 30, 2016

The Constitution of the State of Florida, Statute 200.181

Public Communications NetFiscal Service Services Available

Year Tax Tax Other(1) Revenue Principal Interest Coverage

2007 $ 291,005 $ 3,180 $ 137,619 $ 431,804 $ 105,000 $ 271,002 115 %

2008 310,121 2,953 78,984 392,058 110,000 261,790 105 %

2009 328,578 3,417 96,540 428,535 115,000 258,134 115 %

2010 362,487 3,214 73,631 439,331 115,000 264,771 116 %

2011 358,061 3,012 177,016 538,089 186,667 330,215 104 %

2012 337,506 3,031 161,278 501,815 258,333 315,845 88 %

2013 349,627 3,105 145,686 498,418 254,348 289,861 92 %

2014 370,330 3,104 142,068 515,502 270,652 290,328 92 %

2015 370,020 3,187 178,937 552,144 275,652 281,311 99 %

2016 374,928 3,198 174,366 552,492 342,588 269,757 90 %

(1) Includes transfers from Local Option Sales Tax (Infrastructure) funds and General Fund.

102


PLEDGED-REVENUE COVERAGELAST TEN FISCAL YEARS

Debt Service

DEMOGRAPHIC AND

ECONOMIC

INFORMATION

Education Level

Household Per Capita Median of Years of Formal School Unemployment

Year Population(1) Income(2) Income(2) Age(2) Schooling(3) Enrollment(4) Rate(5)

2007 1,804 $ 72,140 $ 55,547 54.1 12.5 35 4.0

2008 1,806 61,641 45,000 56 12.5 35 7.1

2009 1,787 61,641 45,002 56 12.5 44 11.2

2010 1,782 61,641 40,002 56 12.5 65 12.4

2011 1,420 54,678 45,343 59.1 12.5 24 10.7

2012 1,420 52,787 44,868 59.5 12.5 33 4.7

2013 1,429 66,304 59,200 60.5 14.67 24 7

2014 1,441 66,304 59,200 55.4 14.72 62 5.7

2015 1424* 66,304 59,200 55.4 15.4 56 4.7*

2016 1,499 54,115 61,641 62.2 15 44 5.1

(1) Google Public Data Sept. 2013

(2) City-Data.com Jan. 2015

NOTE: Data is for an unspecified point each year, not specifically September 30.


DEMOGRAPHIC STATISTICS


103

Number of Number of

Employer Employees Rank Employees Rank

Salt Rock Grill 125 1 125 1

The Pub 95 2 35 2

Town of Indian Shores 29 3 28 3

Smugglers Cove 12 4 5 9

Mickey Quinn's 9 5 6 8

Seven-11 Store N/A - 8 7

Sun Vista Realty 7 6 16 5

Beach & Bay Realty 3 7 8 6

Jack Collins Realty 0* - 22 4

Fifth Third Bank 4 7 5 10

Source: Finance Office, Town of Indian Shores, FL

*Out of business

104


PRINCIPAL EMPLOYERS

CURRENT YEAR AND TEN YEARS AGO

September 30, 2016

2016 2006

OPERATING

INFORMATION

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

General Government 5.00 5.00 5.00 5.33 6.33 6.33 6.33 6.33 6.33 6.33

Public Safety:

Police

Officers 11 11 10.67 10.67 10.67 10.67 10.67 10.67 10.67 10.67

Civilians 2.00 2.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00

Building 1.00 1.00 1.00 1.00 2.00 2.00 2.00 2.00 2.00 2.00

Public Works:

Maintenance 2.00 2.00 3.00 1.50 1.50 2.50 3.00 3.50 4.00 4.00

Total 16.00 16.00 22.67 21.50 23.50 24.50 25.00 25.50 26.00 26.00

Source: Town Budget Office

105


FULL-TIME GOVERNMENT EMPLOYEES BY FUNCTION


Function 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

Police

Physical arrests 131 126 112 101 146 154 165 200 226 339

Parking violations 372 492 700 357 386 103 488 581 890 1,038

Traffic violations 359 330 862 706 724 706 860 739 1,167 1,330

Highways and Streets

Street resurfacing (miles) - - - - - - - - - -

Potholes repaired - - - - - - 1 - - -

Culture and recreation

Library Cards Issued 275 333 282 294 230 93 118 123 116 122

Building

Number of permits issued 672 573 450 408 411 458 456 468 387 419

Sources: Various government departments.

Note: Indicators are not available for the general government function.

106


OPERATING INDICATORS BY FUNCTION


Fiscal Year

Function 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

Public Safety

Police:

Stations 1 1 1 1 1 1 1 1 1 1

Patrol units 5 5 5 5 5 5 5 5 5 5

Highways and Streets

Streets (miles) 2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05

Street lights 146 146 146 146 146 146 146 146 146 76

Traffic signals 1 1 1 1 1 1 1 1 1 1

Culture and recreation

Park acreage 2.66 2.66 2.66 2.66 2.66 2.57 2.57 2.57 2.57 2.57

Tennis courts 1 1 1 1 1 1 1 1 1 1

Community Centers 1 1 1 1 1 1 1 1 1 1

Sources: Various Town departments.

Note: No capital asset indicators are available for the general government function.

107


CAPITAL ASSET STATISTICS BY FUNCTIONLAST TEN FISCAL YEARS

Fiscal Year

Company Amount Premium

From To

Public Risk Insurance 1,500,000 10/1/2015 9/30/2016

7,582,747 36,521$

7,582,747

Flood 1,000 5,000,000

1,000 5,000,000

7,582,747

1,000 250,000

Add'l Expense 1,000 1,000,000

Business Income 1,000 500,000

Errors & Omissions 1,000 250,000

Demo & Inc Cost of Construction 1,000 500,000

1,000,000

Employee Dishonesty 500,000 1,000

Theft, Disappear & Destruction 500,000

Funds Transfer 500,000

Computer Fraud 500,000

Forgery/Alterations 500,000

1,500,000 4,599

Employee Benefits 1,500,000

LE Liability 1,500,000 13,225

1,500,000 10/1/2015 9/30/2016 8,720

Employment Practices Liab 1,500,000

Cyber Liability 1,000,000

Statutory 10/1/2015 9/30/2016 42,262

10/1/2015 9/30/2016

Auto Liability 1,500,000 2,881

Uninsured Motorist 20,000

Comp/Collision 500 deductible 3,382

Hired Phys Damage 500 deductible 35,000

Medical Pymts 5,000

785

670

Total 114,045$

Town Hall Bldg Wright National Flood 500,000 10/15/2015 10/15/2016 3,177

19305 Gulf Blvd. Prop & Casualty 5,000 214,800

Agent: Mitchell

Nature Refuge Wright National Flood 392,300 10/23/2015 10/23/2016 1,632

Restrooms & Prop & Casualty

Pavilions - 19019 Gulf Blvd (Rec Area) Agent: Mitchell

Total 4,809

Special Event

Liquor Liability

St Patrick' Day

2,500 deductible

Workers Comp

Automobile

General Liability

Public Officials 2,500 deductible

Crime

Accts Receivable

Inland Marine 1,000

1,000

Term

Property PRIA/PGIT

Equip Breakdown

5% Min $10,000


SCHEDULE OF INSURANCE IN FORCE

OCTOBER 1, 2015 TO SEPTEMBER 30, 2016

Buildings & Contents

Named Windstorm

TRIA Terrorism

Type of Coverage Policy Number Deductible

AD&D, D-5

Flood Insurance

09 1150116759 07 5,000

108

09 1150125762 07 1,250

1,000

1,000

1,000

1,000

2,500 deductible

109

Town of Indian Shores, FloridaService Efforts and Accomplishments Measures

October 1, 2015 – September 30, 2016

Indian Shores Redington Shores

FY 2015 FY 2016 FY 2015 FY 2016Calls for service 3,541 4,054 3.985 5,472Response to Calls 3,541 4,054 3,985 5,472Cases Assigned 70 89 86 98Crimes Investigated 57 85 69 96Arrests 53 70 51 61Crimes Cleared/Arrest 47 62 42 59Death/Bodily Injury 13 24 9 31Crimes Reported 135 112 116 118Persons Contacted/Served 12,002 13,082 12,839 13,995

%Violent Crimes Cleared 100% 100% 95% 100%UCR Part II CrimesArrests

38 48 42 53

Population 1,441 2,700Households 2,557 2,158Businesses 157 30Land Area .336 0.040Value of Property withinJurisdiction

740,811,125 564,877,727


SERVICE EFFORTS AND ACCOMPLISHMENTS MEASURES / POLICE DEPARTMENT

IMPUTS: FY15 FY16

Budget Apropriations 1,238,332 1,242,680

Cost of Equipment Used

Number of Personnel 12 12

OUTPUTS and OUTCOMES:

Calls for Service 7,526 9,526

Response to Calls for Service 7,526 9,526

Cases Assigned 156 187

Crimes Investigated 126 181

Arrests 104 131

Crimes Cleared by Arrest 89 121

Death and Bodily Injury 22 55

Day of Productive Activity Lost 297 240

Value of Property Lost 30,361 52,267

Value of Property Recovered 11,500 26,450

Crimes Reported 251 230

Hours of Patrol 18,720 18,910

Crime-Prevention Activities 2,080 2,080

Persons Contacted/Served 24,841 27,077

RATIOS (Modified UCR):

Percentage of Violent Crimes Cleared 95% 97.5%

Number of Part II Arrests (excluding Traffic 82 101

SERVICES QUALITY:

Response Time (average minutes) 1.02--2.0 1.02--2.0

Responses Below 4 Minutes 98% 98%

Citizen Satisfaction 98% 98%

Complaints of Excess Force 1 0

JURISDICTION:

Population 4,141

Households 5,015

Businesses 187

Land Area (square miles) 0.736 0.736

Dollar Value of Property

withiin Jurisdiction 1,558,583,013

110

OTHER REPORTS

TOWN OF INDIAN SHORES

REPORT ON INTERNAL CONTROLOVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASEDON AN AUDIT OF THE FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITHGOVERNMENT AUDITING STANDARDS

AND

MANAGEMENT LETTER

AND

REPORT ON ATTESTATION

AND

MANAGEMENT MEMORANDUMON REVIEW OF INTERNAL CONTROL STRUCTURE

September 30, 2016

DAVIDSON, JAMIESON & CRISTINI, P.L.Certified Public Accountants

REPORT ON INTERNAL CONTROLOVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASEDON AN AUDIT OF THE FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITHGOVERNMENT AUDITING STANDARDS


1956 Bayshore BoulevardDunedin, Florida 34698-2503(727)734-5437 or 736-0771

FAX (727) 733-3487 MemberMembers of the Firm American Institute of

John N. Davidson, CPA, CVA Certified Public AccountantsHarry B. Jamieson, CPA Florida Institute of

Richard A. Cristini, CPA, CPPT, CGFM Certified Public AccountantsJeanine L. Bittinger, CPA, CPPT




INDEPENDENT AUDITOR’S REPORTON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

We have audited, in accordance with the auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, and the AICPA ProfessionalStandards AT Sections 601.55 and 601.56, the financial statements of the governmental activities,the business-type activities, each major fund, the budgetary comparisons for the general fund andthe aggregate remaining fund information of the Town of Indian Shores, Florida, as of and for theyear ended September 30, 2016, and the related notes to the financial statements, which collectivelycomprise the Town of Indian Shores, Florida’s (Town) basic financial statements, and have issuedour report thereon dated October 31, 2017.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Town’s internalcontrol over financial reporting (internal control) to determine the audit procedures that areappropriate in the circumstances for the purpose of expressing our opinion on the financialstatements, but not for the purpose of expressing an opinion on the effectiveness of the Town’sinternal control. Accordingly, we do not express an opinion on the Town’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, to prevent,or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or acombination of deficiencies, in internal control such that there is a reasonable possibility that amaterial misstatement of the entity’s financial statements will not be prevented, or detected andcorrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,in internal control that is less severe than a material weakness, yet important enough to meritattention by those charged with governance.

111



Our consideration of internal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might be materialweaknesses or, significant deficiencies. Given these limitations, during our audit we did not identifyany deficiencies in internal control that we consider to be material weaknesses. However, materialweaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Town’s financial statements are freeof material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts, and grant agreements, noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing an opinionon compliance with those provisions was not an objective of our audit, and accordingly we do notexpress such an opinion. The results of our tests disclosed no instances of noncompliance or othermatters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theentity’s internal control or on compliance. This report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the entity’s internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.

October 31, 2017

112

MANAGEMENT LETTER







The Honorable Mayor andTown Council


Report on the Financial Statements

We have audited the financial statements of the Town of Indian Shores, Florida as of and for the fiscalyear ended September 30, 2016 and have issued our report thereon dated October 31, 2017.

Auditor’s Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United Statesof America; the standards applicable to financial audits contained in Government Auditing Standards,issued by the Controller General of the United States; and Chapter 10.550, Rules of the AuditorGeneral

Other Reports and Schedule

We have issued our Independent Auditors Report on Internal Control over Financial Reporting andCompliance and Other Matters Based on an Audit of the Financial Statements Performed inAccordance with Government Auditing Standards; and Independent Accountant’s Report on anexamination conducted in accordance with AICPA Professional Standards, Section 601, regardingcompliance requirements in accordance with Chapter 10.550, Rules of the Auditor GeneralDisclosures in those reports and schedule, which are dated October 31, 2017, should be consideredin conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i)1., Rules of the Auditor General, require that we determine whether or notcorrective actions have been taken to address finding and recommendations made in the precedingannual financial audit report. Corrective actions have been taken to address findings andrecommendations made in the preceding annual financial report. There were no findings orrecommendations made on internal control and compliance issues during the preceding annualfinancial audit.

113



Official Title and Legal Authority

Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legalauthority for the primary government and each component unit of the reporting entity be disclosedin this management letter, unless disclosed in the notes to the financial statements. This disclosurehas been included in the Town’s Comprehensive Annual Financial Report for the fiscal year endedSeptember 30, 2016.

Financial Condition

Sections 10.554(1)(i)5.a. and 10.556(7) Rules of the Auditor General, require that we applyappropriate procedures and report the results of our determination as to whether or not the Town ofIndian Shores, Florida has met one or more of the conditions described in Section 218.503(1), FloridaStatutes, and identification of the specific condition(s) met. In connection with our audit, wedetermined that the District did not meet any of the conditions described in Section 218.503(1),Florida Statutes.

Pursuant to Section 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financialcondition assessment procedures. It is management’s responsibility to monitor the Town of IndianShores, Florida’s financial condition, and our financial condition assessment was based in part onrepresentations made by management and the review of financial information provided by same.

Annual Financial Report

Sections 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, require that we applyappropriate procedures and report the results of our determination as to whether the annual financialreport for the Town for the fiscal year ended September 30, 2016, filed with the Florida Departmentof Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with theannual financial audit report for the fiscal year ended September 30, 2016. In connection with ouraudit, we determined that these two reports were in agreement.

114



Other Matters

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. In connection with our audit, we didnot have any such recommendations.

Section 10.554(1)(i)3., Rules of the Auditor General, require that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or likely to have occurred,that have an effect on the financial statements that is less than material but which warrants theattention of those charged with governance. In connection with our audit, we did not have any suchfindings.

Purpose of this Letter

Our management letter is intended solely for the information and use of the legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, Federal and other granting agencies, the Board of Commissioners, and applicablemanagement, and is not intended to be and should not be used by anyone other than those specifiedparties.

October 31, 2017

115

ATTESTATION REPORT






Karen Curran, CPA, CVALoraine M. Jones, CPA*

INDEPENDENT ACCOUNTANT’S REPORT



We have examined the Town of Indian Shores, Florida’s compliance with Section 218.415, FloridaStatutes, regarding the investment of public funds during the year ended September 30, 2016.Management is responsible for the Town’s compliance with those requirements. Our responsibilityis to express an opinion on the Town’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the AmericanInstitute of Certified Public Accountants and, accordingly, included examining, on a test bases,evidence about the Town’s compliance with those requirements and performing such other proceduresas we considered necessary in the circumstances. We believe that our examination provides areasonable basis for our opinion. Our examination does not provide a legal determination on theTown’s compliance with specified requirements.

In our opinion, the Town complied, in all material respects, with the aforementioned requirementsfor the year ended September 30, 2016.

This report is intended solely for the information and use of the Town and the Auditor General, Stateof Florida, and is not intended to be and should not be used by anyone other than these specifiedparties.

October 31, 2017

116

MANAGEMENT MEMORANDUMON REVIEW

OF INTERNAL CONTROL STRUCTURE







October 31, 2017

The Honorable Mayor

and Town Council


We have audited the financial statements of the governmental activities, the business-type activities,

each major fund, the budgetary comparisons for that general fund and the aggregate remaining fund

information which collectively comprise the basic financial statements of the of the Town of Indian

Shores, Florida as of and for the year ended September 30, 2016, and have issued our report thereon

dated October 31, 2017.

We have issued our Report on Compliance and Internal Accounting Controls in Accordance with

Government Auditing Standards dated October 31, 2017. Disclosure in that report, if any, should be

considered in conjunction with this management memorandum.

We conducted our audit in accordance with United States generally accepted auditing standards and

the standards applicable to financial audits contained in Government Auditing Standards, issued by

the Comptroller General of the United States.

117

In planning and performing our audit of the financial statements of the Town of Indian Shores, Florida

we considered the Town’s internal control structure to determine our auditing procedures for the

purpose of expressing our opinion on the financial statements and not to provide assurance on the

internal control structure.

However, during our audit we observed an opportunity for strengthening internal control and

operating efficiency.

2015-2016

A. Audit Schedule

2014-2015

A. Implementation of New GASB Statements

118

2015-2016

2016-1 Audit Schedule

In order to expedite the 2016-17 audit fieldwork, it is imperative that the Town’s Finance

Department complete all of the audit preparation prior to the start of fieldwork. This

includes debt schedules, compensated absences, and fixed asset schedules. The

preparation of all of the audit schedules in advance will make the audit process much

more efficient.

119

2014-2015

2015-1 Implementation of New GASB Statements

We recommended that the Finance Director and the Town Administrator become familiar

with the following new GASB Statements.

GASB Statement No. 82 Pension Issues - an amendment of GASB Statement

No. 67, No. 68, and No. 73.

GASB Statement No. 75 Accounting and Financial Reporting for

Postemployment Benefits Other Than Pensions.

GASB Statement No. 74 Financial Reporting for Postemployment Benefits

Other Than Pension Plans.

GASB Statement No. 73 Accounting and Financial Reporting for Pensions and

Related Assets That Are Not Within the Scope of GASB No. 68, and

Amendments to Certain Provisions of GASB Statements 67 and 68.

GASB Statement No. 72 Fair Value Measurement and Application.

This recommendation has been implemented.

120

* * * * * *

This memorandum is intended solely for the use of the Mayor and Town Council, the Pinellas

County, Florida Board of Commissioners and the State of Florida Office of the Auditor General and

is not intended to be and should not be used by anyone other than these specified parties.

We appreciate the courtesy and assistance provided to us by the Town’s personnel during our audit.

We will review the status of the above comments during our next audit engagement. We have already

discussed many of these comments and suggestions with Town personnel, and we will be pleased to

discuss them if further detail at your convenience, to perform any additional study of these matters,

or to assist you in implementing the recommendations.

DAVIDSON, JAMIESON & CRISTINI, P.L.

121

MANAGEMENT RESPONSE

122

TOWN OF INDIAN SHORES, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT ... › pages › mun_efile rpts › 2016 indian shores.pdf · COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR

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